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More Sudan Stock Holdings Revealed

By Paras D. Bhayani, Crimson Staff Writer

Harvard’s investments in two Chinese oil firms accused of financing the genocide in Sudan now total nearly $16 million, The Crimson’s continuing investigation of the University’s stock holdings has found.

Although Harvard has said that it would sell its shares in the two firms, PetroChina and Sinopec, it appears that the University's holdings in both firms have actually increased since the divestitures were announced.

The Crimson reported Monday that Harvard—through a fund managed by the British bank Barclays—owns a stake in the two firms worth well over $6 million. Now it appears that a second exchange-traded fund managed by Barclays gives the University an additional stake in the two companies that exceeds $9 million.

Harvard maintains that stake despite its April 2005 announcement that “the unique pattern of circumstances relating PetroChina to the crisis in Sudan counsels in favor of taking the extraordinary step of divestment.”

Nearly a year later, Harvard announced that it would divest its stock in Sinopec, also known as the China Petroleum & Chemical Corp. Harvard said at the time that “the particular combination of circumstances bearing on Sinopec Corporation’s involvement in oil production activities in Sudan warrants the unusual step of divestment.”

But Harvard still indirectly owns significant quantities of stock in both PetroChina and Sinopec.

In its most recent federal regulatory filing, the University disclosed that it owns 492,493 shares in Barclays’ iShares FTSE/Xinhua China 25 fund. As of yesterday evening, those shares were worth $51.3 million.

Harvard also reported that it held 4,648,840 shares of the bank’s iShares MSCI Emerging Markets Index fund. Those shares were worth $504.6 million at the close of trading yesterday. The emerging markets fund is one of the University’s single largest investments.

According to the most recent data provided by Barclays, the China fund had invested 8.4 percent of its assets in PetroChina and 4.2 percent in Sinopec, meaning that Harvard holds about $4.3 million of stock in PetroChina and $2.1 million in Sinopec through that arrangement.

Meanwhile, the emerging markets fund had invested 1.1 percent of its assets in PetroChina and 0.7 percent in Sinopec, meaning that Harvard holds another $5.7 million in PetroChina stock and $3.5 million in Sinopec through that mechanism.


The revelation that the University could own $16 million in PetroChina and Sinopec stock is particularly stunning considering that at the time of the earlier, highly-publicized divestitures, Harvard’s disclosed direct investment in the two companies totaled just $10 million.

Interim President Derek C. Bok, who has written widely on divestiture, said the iShares investments predated his tenure as president, which began July 1. His spokesman, John D. Longbrake, said the school declines to comment on individual investments.

The University has no direct control over the distribution of assets at either of the Barclays iShares funds.

The iShares China fund is invested according to a formula set by the Financial Times, the London Stock Exchange, and the Chinese news agency Xinhua. It allows investors to spread their assets across 25 of China’s largest companies.

The iShares emerging markets fund allows participants to spread their investments across 25 developing countries. That fund follows a formula developed by Morgan Stanley Capital International.

Because Harvard owns the PetroChina and Sinopec shares through index funds, the University can only divest from the companies by selling off its entire stake in each of the two iShares entities.


PetroChina’s parent company, the China National Petroleum Corporation, and Sinopec are both members of a consortium known as Petrodar that is aiding the Sudanese government in the development of the east African country’s oil industry. The companies’ combined investment in the Sudanese oil industry totals to well over $1 billion, and profits from the industry are a major source of revenue for the Sudanese government.

Another member of the Petrodar partnership is the Malaysian oil firm Petronas. Harvard indirectly owns an estimated $400,000 stake in Petronas via another arrangement with Barclays, the MSCI Malaysia Index Fund.

The Petrodar consortium provides an important source of revenue for the oil-reliant Sudanese government, and profits from the consortium are shared with the government.

Arab militias in Darfur, with support from the Sudanese government, have uprooted and exterminated hundreds of thousands of black, Muslim villagers in a campaign that the U.S. State Department and Congress have both termed genocide. More than 400,000 people have died in the four-year-old conflict, and more than two million have lost their homes, according to U.N. officials’ estimates.

Harvard’s indirect investment in a fourth firm that aids the Sudanese energy industry, the Indian state-owned conglomerate Bharat, is estimated at about $320,000. That stake is held through two India-specific funds administered by Morgan Stanley and the Blackstone Group.

Several schools, including Amherst, Columbia, and the University of California, have already divested from Bharat.

All Ivies have made some move to divest from Sudan-related stocks following Harvard’s 2005 announcement that it would sever ties to PetroChina.

Harvard held an approximately $5 million stake in a fifth Sudan-linked company, Tatneft, earlier this year. Divestment activists have accused the Russian-run Tatneft of aiding the Sudanese government. Tatneft moved this summer to shift its stock to a London exchange—which means that Harvard is no longer required to disclose its holdings in the firm.

In accordance with federal regulations, Harvard discloses its holdings in domestically-traded stocks and exchange-traded funds four times a year. Harvard’s most recent filing with the Securities and Exchange Commission details the University’s public holdings as of Sept. 30, 2006. The next filing is expected to come early next month.

Divestment advocate John Prendergast, the National Security Council’s director of African affairs during the Clinton administration, said Sunday that the University should pull out of the Barclays iShares arrangement.

“If correct, this points to the hidden danger of divestment: that shares in companies considered divested still continue to be owned indirectly through mutual funds and other equity arrangements,” Prendergast wrote in an e-mail Sunday. “A fuller scrub of all investment tools is required, and shouldn’t be left to university newspapers to uncover.”

The co-founder of the Harvard Darfur Action Group, Rebecca Hamilton, said yesterday that she is “hopeful that the Corporation will move quickly to ensure the University’s good reputation on this issue is not called into question by indirect investments in companies it has already decided to divest from directly.”

“Harvard knows that students are watching them on this issue,” Hamilton, a student in a Harvard Law School/Kennedy School of Government joint-degree program, said.

—Staff writer Paras D. Bhayani can be reached at

Harvard’s stakes in PetroChina and Sinopec have increased since the University “divested” in 2005.

$10.1: Millions invested by Harvard in the two companies at the time of the 2005 divestitures

$15.7: Millions invested in the two companies through two indexed funds today


ENDOWMENT TIED TO SUDAN: University bought stock in oil firm that activists say helped fuel genocide (Oct. 25, 2004).

HARVARD'S SINOPEC SHARES REMAIN: Despite divestment announcement, University still appears to own several million dollars worth of stock in controversial companies (May 13, 2005).

HARVARD STILL HOLDS SUDAN STAKE: Through index fund, school owns estimated $6.6 million in PetroChina, Sinopec stock (Jan. 7, 2007).

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