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Teacher retirement board to consider dumping investments with ties to Sudan Friday, Apr 27, 2007 By Jason Wiest Arkansas News Bureau LITTLE ROCK - Trustees of the Arkansas Teacher Retirement System board will consider divesting about $20 million in investments in Sudan, executive director Paul Doane said at the board's regular meeting Thursday. The board's investment committee will consider the matter in a June meeting, he said, after the state Legislature passed a concurrent resolution, later signed by Gov. Mike Beebe, encouraging state retirement systems to divest investments in companies that operate in Sudan and prevent any future investment in a company in Sudan until the genocide in Darfur has ended. The Sudanese army and Arab militias have killed an estimated 200,000 Darfurian Muslims over the past four years. Some companies are allegedly doing business with Sudan's government. "It's a complex issue," Doane told board members. "There are some interesting issues I think are worth discussing." Several issues complicate the matter, Doane said, including identifying companies involved with Sudan's government. With so many interlocking entities, it's possible to confuse a company's subsidiary, which could be doing business with the government, with the actual company, he said. Of utmost importance to remember, Doane repeatedly told board members, is that the investment money is not in any way controlled by Arkansas government. "The assets are contributed by members of this system," Doane said. "(The assets) are not state money, they're the members' money. There is that responsibility you have to those members to invest in funds as widely as possible." Doane said he believed that if the investments were sold now, a profit would be made, making the situation less complicating. Even though the system would profit, selling the investments could set a dangerous precedent. The government could ask retirement systems to sell investments in larger companies in the future to send political messages, he said. "At some point, when you get into a nation like Iran, you're talking about hundreds of millions of dollars," Doane said. Doane suggested that the board could instruct its investment managers not to make any new purchases or to get out of investments when the managers feel it is prudent, "rather than to simply dump the securities." Patrick J. Kelly Jr., a chartered financial analyst with Chicago-based Ennis Knupp and Associates, an independent investment adviser for the board, agreed with Doane's second suggestion. "I think there are some companies that have allegedly been really bad offenders where they're providing helicopter pads for government troops who are committing genocide," Kelly said, noting that a manager could choose to divest in such a company. "But throwing Coca-Cola in there because they're selling Coke in the country, I think, is really not sending a message whatsoever," he said. "That's just doing more harm to the retirees portfolio, if anything," he added, noting that such a big company would have a big impact on a portfolio. |
