Nordic fund KLP divests from Adani Ports over links to Myanmar military

Visual from Adani website

Norwegian pension fund KLP is divesting from Adani Ports and Special Economic Zone Limited on the grounds the company’s links with the Myanmar military breach the fund’s responsible investment policy, KLP said on Tuesday.

Adani Ports, India’s largest port operator, has been under scrutiny from international investors over its project to build a container terminal in the city of Yangon on land leased from a Myanmar military-owned conglomerate.

A military coup in Myanmar on Feb. 1 and an ensuing crackdown on mass protests in which hundreds have been killed have drawn international condemnation and sanctions on military figures and military-controlled entities.

Adani‘s operations in Myanmar and its business partnership with that country’s armed forces constitute an unacceptable risk of contributing to the violation of KLP’s guidelines for responsible investment,” KLP said in a statement to Reuters.

A spokesperson for the Myanmar military did not answer calls from Reuters seeking comment.

KLP, Norway’s largest pension fund, had an investment worth nine million crowns ($1.05 million) in Adani Ports at the time of its decision, it told Reuters.

It was divesting because the container terminal is being built on land owned by the Myanmar military and that there is an “imminent danger” the armed forces could use the port to import weapons and equipment, or as a naval base.

“In this way, the port could be used by the army to continue its violations of human rights,” KLP said.

Adani said it condemned the violence in Myanmar and the violations of the fundamental rights of its people and that, at the time the deal was concluded in 2019, its counterparties were entities of the democratically-elected government.

It reiterated it could abandon the project and write down the investment if it is found to be in violation of sanctions imposed by the United States.

“The write-down will not materially affect the balance sheet as it is equivalent to about 1.3% of…total assets,” it said in a statement to Reuters.

KLP said it had been in a dialogue with Adani Ports since March this year and held a meeting with the company’s management in April.

Adani told KLP “it takes human rights seriously, and that it has a human rights policy”, KLP said.

At the same time, “Adani said it had made no due diligence assessments relating to human rights before the agreement it concluded with the Myanmar military”, KLP said.

Adani did not reply to a question about KLP’s statement.

An activist group welcomed KLP’s decision to divest from Adani Ports.

“We call on other pension funds to follow suit and divest from Adani Ports and other business partners of the Myanmar military,” Yadanar Maung, a spokesperson for Justice for Myanmar, said.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.