US fund house TIAA-CREF has exited Oil and Natural Gas Corporation (ONGC) and other Chinese energy companies over their investments in war-torn Sudan, but the Indian company said its operations did not support suppressive activities anywhere in the world.
TIAA-CREF has sold its holdings in ONGC, PetroChina, CNPC Hong Kong and Sinopec, the New York-based fund said in a statement.
The US fund house had a tiny shareholding in ONGC and stakes sold across the four companies constituted a small slice of its $402 billion assets under management.
“Our decision to sell shares in these companies culminated a three-year effort to encourage them to end their ties to Sudan or attempt to end suffering there,” TIAA-CREF’s Chief Executive Roger W Ferguson Jr said.
ONGC, which has a stake of 25% in the Greater Nile Oil Project through its overseas arm OVL, said its business did not support any ‘suppressive’ activities or human rights violations anywhere in the world.
“We at ONGC are very conscious that our operations do not cause any concern or anyway convey our support to any oppressive activity anywhere in the world,” Chairman and Managing Director R S Sharma said.
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Sudan is in the midst of a civil war that broke out in 2003 when Christian groups accused Khartoum of oppressing them in favour of Muslim-Arabs.
ONGC said it was concerned about TIAA-CREF’S move but the business in Sudan would continue.
With the objective of securing energy security for the country, the state-owned company entered oil-rich Sudan about seven years ago, buying 25 per cent stake in the Greater Nile Project, from which Canada’s Talisman Energy exited under pressure from human rights group.
ONGC Videsh Ltd’s entire investment was paid off in less than three years from the investment.
Sharma said ONGC’s operations in Sudan were far away from the conflict regions in the south. “We are conscious that we are in no way conveying any support to any suppressive activity anywhere in the world, including our own country.”
The decision by TIAA-CREF would not impact OVL’s decision to invest in Sudan, he said adding the state-run company valued support from all investor groups and “feels concerned and pained” at withdrawal by any investor group.
“But we do not think there is any reason for us to withdraw or reduce our operations (in Sudan). We are not the oppressors or anyway supporting such acts,” he said.
Last year in March, TIAA-CREF had announced plans to “intensify pressure on five companies (PetroChina, CNPC Hong Kong, ONGC, Sinopec, and Petronas of Malaysia) that maintain business relations with the government of Sudan to cease those relations or attempt to ease suffering and end genocide in Darfur”.
The US pension manager had small stakes in the companies and its decision failed to damp immediate appetite for ONGC’s shares – which gained over 1.6 per cent at Rs 1,207 at 2.30 pm on the Bombay Stock Exchange.
“While TIAA-CREF met with each of the companies in the ensuing months, there was insufficient progress to warrant continued dialogue with PetroChina, CNPC Hong Kong, ONGC and Sinopec and, consequently, TIAA-CREF has sold its holdings in those companies across all funds and accounts as of December 31, 2009,” the statement by the US fund house said.
“We have not divested from Petronas, which has acknowledged our concerns and engaged in dialogue about how it might address them.”