Posted 2/17/2010 5:58 PM from Fund Action in Financial Advisor Center
--Hillary Jackson
Investors Against Genocide is lauding American Funds ' recent $190 million divestment in PetroChina , the publicly traded arm of China National Petroleum Company that the activist group says is linked to ongoing genocide in Darfur. "Just as earlier we were critical of American Funds because of its large holdings of PetroChina, we are happy to commend them for their bold action," Eric Cohen , chairman of Investors Against Genocide, told FA .
An American Funds spokesman confirmed the firm had sold most of its holdings in PetroChina, he declined to say why. "We have a long-standing policy that we don't ever discuss our reasons for buying or selling a company. We spend a lot of time and energy, a lot of money, reaching a decision about a company and we feel that that is proprietary to our shareholders," he told FA .
Investors Against Genocide campaigns broadly for mutual fund companies to divest their holdings in companies with ties to genocide and attended American Funds' shareholder meeting on Nov. 24 to persuade the firm to shed its investments in PetroChina. China National Petroleum Company has had a longstanding partnership with Sudan, which connects the company to genocide in Darfur, according to the activist group.
Cohen said he was surprised when American Funds reported on its Web site last week that its $82 billion Capital World Growth and Income Fund held only 1.4 million shares of PetroChina, compared with nearly 77 million shares at the end of the third quarter; the $79.5 billion Capital Income Builder Fund held 818,000 shares, down from more than 44.4 million shares; and the $100 billion EuroPacific Growth Fund had divested completely shedding its 46.6 million shares.
"We are asking them to make a public statement about why they made their move, but we certainly are drawing that conclusion [that it was the result of Investors Against Genocide's pressure at the shareholder meeting]," Cohen said. He added that he expects American Funds to divest completely and surmised that the firm was in the process of doing so.
TIAA-CREF announced earlier this year that it had sold all of its holdings-worth $58 million-in four companies that are tied to genocide in Darfur, a move also lauded by Investors Against Genocide. Cohen said he hopes the rest of the industry will follow suit. "The problem in the mutual fund industry is very broad based," he said.