Darfur activists to prod 4 more mutual fund firms

Expanding their criticism of US mutual fund holdings tied to Sudan's regime, activists today plan to target four more companies in hopes they will follow the lead of Fidelity Investments and sell their stakes of companies that do business there.

The companies include some of the world's largest mutual fund complexes, including Vanguard Group Inc. of Pennsylvania and the American Funds, run from California. In addition, activists say they still aim to pressure Fidelity of Boston, which in May disclosed it had sold many shares in PetroChina Co. Ltd. but said the sales were not a coordinated response to the criticism.

Holdings in PetroChina, the Beijing oil company, have become a flashpoint in the debate over the support Sudan's rulers have given to brutal militias whose campaigns the US government has labeled a genocide and blamed for many deaths in the country's Darfur region. PetroChina parent China National Petroleum Corp. is one of the Khartoum government's chief foreign investors and has drawn wide criticism from human rights groups.

Until now activists had declined to say whether they would continue to target Fidelity with critical advertising. But Fidelity still owned about $608 million in PetroChina as of Aug. 1 through various US and internationally based funds, the activists now estimate based on public filings on several exchanges.

"We're still targeting them because they haven't fully divested," said Zahara Heckscher, campaign manager for the Save Darfur Coalition in Washington, whose member organizations include major large religious groups, the NAACP, and the AFL-CIO. "We're asking them to do the same thing we're asking the others."

In addition to pressuring Fidelity, she said the coalition soon will run print and television advertisements, gather petition signatures, and take other steps to pressure Vanguard, American, and the two largest domestic mutual fund families it found invested in PetroChina, Franklin Resources Inc., with an estimated $1.7 billion, and JPMorgan Chase & Co., with an estimated $1.6 billion.

Fund companies say they are required to act in the interests of investors under their original charters and that political problems are best handled by government bodies. But as workers pump billions of dollars a year into retirement savings plans, the fund companies are finding their shareholders include a growing number of activist-minded investors.

Federal rules bar US companies from doing business in Sudan, but don't prohibit investments in foreign firms with operations there.

Technically, PetroChina says it doesn't operate in Sudan, but rights groups have targeted the company as a way to pressure its state-controlled parent, China Petroleum. PetroChina's shares are traded both on the Hong Kong Stock Exchange and on the New York Stock Exchange.

To arrive at their estimates, Save Darfur activists reviewed Bloomberg data for both exchanges, with input from Massachusetts activists such as Eric Cohen, a previous critic of the funds companies.

A chief reviewer was Adam Sterling, director of the Sudan Divestment Task Force, which says to date 20 states and more than 50 universities including Harvard, the Massachusetts Institute of Technology, and the University of Massachusetts have begun to divest from Sudan. Activists also plan to present Fidelity today with 150,000 signatures on petitions urging it to sell its remaining shares.

Franklin Resources Inc., the San Mateo, Calif., parent of Franklin Templeton Investments, said in a statement, "In our experience investing in emerging markets, we have seen that fostering economic and business development through investment in troubled regions can often help in achieving reform."

A spokeswoman for JP Morgan said she couldn't immediately comment yesterday afternoon because the funds with stakes in PetroChina are based in London and Hong Kong.

A spokesman for American Funds parent Capital Group Cos. in California referred to the company's previous statement that while it appreciates the activists' concerns, "others believe that the rest of the world must stay engaged to have any influence" over Sudanese actions.

A spokeswoman for Vanguard Group in Pennsylvania said two of its three funds with PetroChina stakes are index funds over which it has little input. On the third fund, its obligations to shareholders are best fulfilled by making decisions based on returns rather than political or social issues, she said.

A Fidelity Investments spokeswoman, Anne Crowley, said that many of the Fidelity funds cited by the activists are run by Fidelity International Ltd., a separate company in London with some common ownership. A spokesman there couldn't be reached for comment late yesterday.

In addition, Crowley noted that according to its most recent public disclosures, only two mutual funds available to US investors still held stakes in PetroChina totaling around $65 million, a tiny amount relative to Fidelity's total assets.

Ross Kerber can be reached at kerber@globe.com.