PetroChina Stake Exceeded Earlier Reports

Harvard’s holdings in PetroChina, a Beijing-based oil company that has come under fire for its ties to the Sudanese government, may be greater than the 67,200-share stake that the University reported to the U.S. Securities and Exchange Commission (SEC) last month.

University President Lawrence H. Summers told undergraduates at a Mather House study break Monday night that Harvard’s total PetroChina stake included holdings on Chinese markets as well as the previously-disclosed investment on the New York Stock Exchange (NYSE).

And yesterday, students and activists—already angered by Harvard’s investment in PetroChina, which they claim indirectly supports the genocide perpetrated by the Sudanese regime—called on Harvard to disclose the full extent of its holdings in the controversial company.

The SEC requires that large institutional investors file quarterly reports—known as 13F forms—detailing their holdings on domestic stock exchanges. But the SEC does not require investors to disclose their positions on foreign markets in 13F filings.

PetroChina shares are publicly traded on NYSE in the form of American Depositary Receipts (ADRs)—but shares in the company are traded directly on the Hong Kong Stock Exchange (HKSE) as well.

According to the University’s most recent 13F form, Harvard held 67,200 shares in PetroChina on NYSE as of Dec. 31, 2004. If Harvard has maintained that stake since December, its shares would now be worth $4.23 million.

The SEC filings show that Harvard more than doubled the number of PetroChina shares it holds on the NYSE during the final quarter of 2004.

But Summers told students at the Mather study break that the increase in Harvard’s investment on NYSE was offset by a corresponding decrease in the University’s holdings in the company on the Chinese markets.

Summers did not say whether the University still holds PetroChina shares on HKSE.

Summers’ spokeswoman Lucie McNeil wrote in an e-mail yesterday that “Harvard may own shares that are listed on a U.S. exchange, a foreign exchange, or a combination of the two.” She did not offer further details.

According to McNeil, a committee made up of three members of the Harvard Corporation is weighing the calls for divestment and will reach a final decision on the University’s PetroChina position “in the next few weeks.”

“All shares will be addressed by this decision regardless of the exchange on which they trade,” McNeil wrote.

Summers said Monday night that “what is happening in Darfur is in many ways the major moral issue of our moment.”

Summers’ remarks came after an undergraduate at the study break chastised him for allowing Harvard’s PetroChina holdings to rise even as the Sudanese government aids militiamen who are massacring black Muslims in the country’s western region of Darfur.

Since November, more than 80 professors and several hundred students have signed a petition calling for the University to divest from PetroChina. And dozens of members of the Class of 2005 have pledged to withhold their senior gifts from the Harvard College Fund unless the University sells its stake.

Activists yesterday questioned Harvard’s motives in trading PetroChina shares on foreign markets.

“I see no reason for Harvard to hold anything but ADRs,” Eric Reeves, a Smith College professor and expert on Sudan, wrote in an e-mail yesterday. “[U]sing non-American exchanges for trading purposes seems mighty suspicious.”

In a statement yesterday afternoon, Benjamin B. Collins ’06 and Manav K. Bhatnagar ’06, who launched the campus divestment petition, said that they were unaware of Harvard’s overseas holdings in PetroChina.

“We hope that the Harvard Corporation and the President’s Office are more transparent about Harvard’s investments in Sudan in the future,” Collins and Bhatnagar wrote.

And the Boston-based American Anti-Slavery Group ratcheted up pressure on the University to drop its PetroChina holdings yesterday.

“Harvard should clearly state the full extent of its PetroChina stake,” the group’s associate director, Jesse A. Sage ’98, wrote in an e-mail yesterday.

“PetroChina is fueling these murders and there is no reason for Harvard to be providing financial or moral cover for Chinese government companies aiding [Sudanese leader] General Bashir’s ethnic cleansing campaign,” Sage wrote.

Matthew W. Mahan ’05, an organizer of the campaign to redirect senior gifts, said last night that “the symbolic value of divestment is not contingent upon share volume.”

“Harvard’s holdings are morally wrong,” Mahan said.

A United Nations spokesman estimated on Monday that over 180,000 have died in the conflict in the Darfur region in the past two years.

—Staff writer Daniel J. Hemel can be reached at hemel@fas.harvard.edu.