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Fidelity dumps Petrochina holdings

Reuters and FT.com are reporting that Fidelity Investments has cut its holdings in the US-listed ADRs of PetroChina.

Summary from Reuters:

Fidelity Investments, the world's No.1 mutual fund company, has cut its exposure to PetroChina Co. Ltd. (0857.HK: Quote, Profile , Research) following pressure by human rights groups over the Chinese oil firm's links to Sudan.

In a regulatory filing on Tuesday, Fidelity said it had cut its holding of PetroChina (PTR.N: Quote, Profile , Research) American Depositary Receipts (ADRs) by 91 percent in the first quarter of 2007.

Apparently, Fidelity has decided to give in to the pressure from various human rights groups who are worried about PetroChina's business operations in Sudan and feel that China's influence is obscuring the issue of genocide in that country.


Similar pressure tactics and criticisms have been aimed at Berkshire Hathaway and its highly visible chairman, Warren Buffett, for the company's investment stake in PetroChina. Buffett recently brushed off calls for Berkshire to divest its stake in the company, saying that the company had no issues with PetroChina's operations in Sudan and that the actions of Chinese government was a separate issue that neither he nor Berkshire could control.

Berkshire shareholders voted down the proposal to divest at the company's annual meeting.

As for
PetroChina's share price, it's plain to see the drop in early 2007 that would have coincided with Fidelity selling off most of its stake in the company. Would Berkshire have taken the opportunity to buy more during this time frame?

Update: Latest 13F filings reveal no change in the size of Berkshire's PetroChina holdings from quarter ending March 31, 2007 over the previous quarter. We understand that this info may not give the whole picture, as Buffett/Berkshire are known to argue for delays in sending info regarding investments holdings in an attempt to prevent investor copycatting.

More opinion on
the morality surrounding shareholder divestments and PetroChina from fund manager Cody Willard. See also, Bloomberg columnist, William Pesek's contrary stance.

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