Norway Oil Fund Puts Bombardier on Watch List for Possible Exclusion
March 08 2022 - 7:01AM
Dow Jones News
By Dominic Chopping
Norway's $1.3 trillion sovereign wealth fund has placed Canadian
aircraft manufacturer Bombardier Inc. under observation for
possible exclusion from the fund over ethical concerns, along with
Indian port and logistics company Adani Ports & Special
Economic Zone Ltd. and South Korean logistics firm Hyundai Glovis
Co. Ltd.
The fund is managed by Norway's central bank, but decisions to
exclude or place companies on observation are made based on
recommendations from an ethics council of appointed by the Ministry
of Finance.
The fund adheres to guidelines that mean it doesn't invest in
certain weapons manufacturers, thermal coal miners, tobacco
producers or companies responsible for environmental damage or
which violate human rights, for example.
Norges Bank said in a statement late on Monday that it has
placed Bombardier under observation due to "unacceptable risk that
the company contributes to or is responsible for gross
corruption."
According to the ethics council, investigations revealed that
Bombardier or its subsidiaries can be linked to allegations or
suspicions of corruption in six countries spanning over ten years,
with the cases relating to bribes or suspicious transactions
amounting to over $100 million used to win contracts for
Bombardier's subsidiaries.
However, it said that the majority of allegations and suspicions
of corruption were linked to Bombardier's transportation division,
which was sold in 2021.
The fund held a 0.91% stake in Bombardier at the end of 2021,
worth $29.6 million.
Adani Ports & Special Economic Zone is placed under
observation due to "unacceptable risk that the company contributes
to or is responsible for serious violations of individuals' rights
in situations of war or conflict," Norges Bank said.
An Adani Ports subsidiary had signed a deal with a Myanmar
military-owned company to build a port terminal in the country,
prior to last year's coup.
The company has since said it plans to exit the project but the
ethics council noted significant uncertainty about when such a
withdrawal will be possible to implement.
The fund held a 0.26% stake in Adani Ports at the end of 2021,
worth $53 million.
Norges Bank has also decided to place Hyundai Glovis under
observation due to "unacceptable risk that the company contributes
to gross or systematic human rights violations and serious
environmental damage."
The ethics council said the company has disposed of
decommissioned vessels by sending them to be broken up for scrap on
beaches in Pakistan and Bangladesh, a process that causes severe
environmental damage and where working conditions are extremely
poor.
The fund held a 0.81% stake in Hyundai Glovis at the end of
2021, worth $42.9 million.
Meanwhile, Chinese sportswear manufacturer Li Ning Co. Ltd. has
been excluded from the fund due to unacceptable risk that the
company contributes to serious human rights violations in Xinjiang,
China.
"Producing in or purchasing certain products from this region,
including textiles and cotton, are associated with a particular
risk of becoming involved in forced labour," the ethics council
said.
The fund held 0.59% in Li Ning at the end of 2021, worth $168
million.
Norges Bank added that it has revoked the exclusion of
U.K.-listed oil and gas company San Leon Energy PLC. The company
has been excluded since 2016 due to risk of violating ethical norms
by engaging in petroleum prospecting in Western Sahara, but these
activities have now stopped, it said.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
March 08, 2022 06:46 ET (11:46 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
Bombardier (QX) (USOTC:BDRBF)
Historical Stock Chart
From Nov 2024 to Dec 2024
Bombardier (QX) (USOTC:BDRBF)
Historical Stock Chart
From Dec 2023 to Dec 2024