Berkshire rejects divestment plan
Shareholders of Berkshire Hathaway Inc. decisively rejected a proposal Saturday that would have required the company to sell its $3.3-billion stake in PetroChina Co., a subsidiary of a Chinese government firm that is the largest player in Sudan’s oil industry.
Berkshire Chairman Warren E. Buffett, who owns about one-third of his company’s shares, advised against the proposal, which received less than 2% of votes cast here at Berkshire’s annual meeting.
The proposal was part of a divestment effort aimed at hastening the end of the Darfur conflict -- in which the Sudanese military has engaged in genocide, according to the U.S. government -- by pressuring investors to sell holdings in companies whose activities support the war.
Berkshire is the largest independent shareholder in PetroChina, whose parent company, China National Petroleum Corp., drills and exports much of Sudan’s oil, providing funds for the Sudanese government and its military.
Judith Porter, an investor from Ardmore, Pa., who holds about $36,000 in Berkshire stock, proposed the measure after reflecting on the killing of her grandparents in 1941 by the Nazis.
“Now there is the first genocide of the 21st century in Darfur,” she told Buffett at the meeting. “Your support will send a signal to China and to the Sudan that there are costs for continuing this destruction.”
Afterward, Porter said that the outcome was expected, but that the vote was useful to educate shareholders.
Before the meeting, Buffett had called the Darfur violence “deplorable,” but rejected divestment as misguided.
“I see no effect whatsoever in Berkshire Hathaway trying to tell the Chinese government how to conduct their business,” he said Saturday.
Berkshire’s vice chairman, Charles Munger, objected to any “vigilante” action in a matter of foreign policy that he said was best left up to the U.S. government.
The argument provided a rare, somber moment for the 27,000 shareholders in attendance at “the Woodstock of capitalism” -- so named for its festival-like ambience.
Buffett’s investing success, reputation for integrity and folksy style have endeared him to Berkshire shareholders.
A San Jose shareholder who identified himself as Walter Chang said he and his wife planned to name their baby Warren, after Buffett.
“I want to applaud you for setting another great example, for donating most of your wealth to charity,” another shareholder said, referring to Buffett’s pledge to donate $31 billion to the Bill & Melinda Gates Foundation.
The way in which some of Buffett’s investment choices contradict Gates Foundation goals was the subject of a Times investigation published Friday.
Also at the shareholder meeting, representatives of California fishermen and Indian tribes asked Buffett to intervene in a controversy involving dams operated along the Klamath River by Berkshire subsidiary PacifiCorp. The dams have reduced salmon populations and have affected water quality, threatening many livelihoods.
“Our people are river people; our entire culture and subsistence is centered around the river,” said a woman who represented the tribes, her voice breaking with emotion. She requested a meeting with Buffett to explain the issues.
Buffett said the concerns were countered by the need for renewable hydropower provided by the dams.
“The world does want electricity,” he said, adding that PacifiCorp would abide by regulators’ rulings in the case.
