Norges Bank, the central bank of Norway, has excluded Adani Ports and Special Economic Zone (APSEZ) from its Government Pension Fund Global (GPFG), over the ‘unacceptable risk’ arguing that the company contributes to human rights violations during the times of war and conflicts. Besides, two other companies – Weichai Power Co Ltd and L3Harris Technologies Inc – have also been excluded from the investment by the GPFG.
The company, which is part of billionaire Gautam Adani’s conglomerate, was on the central banks’ watchlist for possible exclusion from investment since March 2022. Billionaire Gautam Adani’s logistics and transportation firm was under scrutiny for its plan to develop a container terminal in Yangon on property leased from a Myanmar military-owned business. The company sold that port project last year. The fund had divested from five Adani companies since 2014 and at the end of 2022, it remained invested in three, including Adani Ports.
APSEZ, a part of the Adani Group, is a logistics company that engages, among other things, in the operation of ports and port services. The decision to exclude APSEZ, which was announced on May 15, is based on a recommendation from the Council on Ethics of November 21, 2023.
Reason for the exclusion
Adani Ports is excluded due to potential violations of individuals’ rights in war situations. The militia in Myanmar has been fighting the military junta that came back to power following a coup in February 2021. Weichai Power, a Chinese company, a manufacturer of transportation equipment, is excluded due to its involvement in armed conflict sales. U.S. defence contractor L3Harris is also being excluded from the fund due to its development and production of components to nuclear weapons, the bank said.
In May 2023, APSEZ disclosed that it had sold its port-related operations in Myanmar to Solar Energy Ltd,” read the statement. “No information on the buyer is available, and APSEZ has stated that it cannot share any such information on the grounds of confidentiality.
Adani Ports didn’t respond to Times of India’s (TOI’s) requests for comments on its exclusion from the Norwegian pension fund’s portfolio. Norges Bank said its decision to exclude Adani Ports from the fund’s portfolio was based on recommendations from Council on Ethics.
Following this news, shares of Adani Ports and Special Economic Zone Ltd fell more than 1.8% to Rs 1,320.55 on Friday. The company’s total market capitalisation now stands at about Rs 2.88 lakh crore. The stock had closed at Rs 1,344.75 in the previous trading session.
In order to manage Norway’s oil wealth and provide long-term savings for present and future generations, the Government Pension Fund Global was founded. Norway’s sovereign wealth fund is valued at $1.7 trillion.
It is the world’s largest single sovereign wealth fund in terms of total assets under management.
At the end of 2022, the Norwegian Fund held shares in Adani Green Energy worth $52.7 million, a stake in Adani Total Gas worth $83.6 million and ownership in Adani Ports & Special Economic Zone worth $63.4 million.
