Berkshire Hathaway Inc. shareholders will vote at their May 5 annual meeting on a shareholder proposal calling for Sudan divestment. The proposal calls for divestment of PetroChina Co. Ltd., a subsidiary of China National Petroleum Corp., which it calls the dominant international player in Sudans oil sector. Berkshire Hathaways board opposes the proposal.
Berkshire Hathaway owns 1.3% of PetroChina, valued at $3.3 billion, according to Berkshire Hathaways annual report.
Warren E. Buffett, chairman and CEO of Berkshire Hathaway, owns about 33% of Berkshire Hathaway.
To begin with, we have seen no records, including the various materials we have received from pro-divestment groups, that indicate PetroChina has operations in Sudan, according to a statement by the board. The controlling shareholder of PetroChina, CNPC, does do business in Sudan. CNPC is 100% owned by the Chinese government, and its activities may logically be attributed to the government of China itself. But the Chinese governments activities can neither be attributed to PetroChina nor the other major Chinese companies the government controls.
Furthermore, if a shareholder such as Berkshire disagrees with the activities of an investee and we emphasize again that PetroChina, to our knowledge, has no operations in Sudan is divesting the proper course for Berkshire? We note that the proposer of this resolution who strongly disagrees with Berkshires decision to hold shares of PetroChina has elected to retain her shares in Berkshire rather than to divest them.