CalPERS, the $291.3bn (€212.4bn) California Public Employees Retirement System, has excluded two London-listed Russian telecoms companies – Mail.ru and MegaFon – due to their links to the controversial ‘Occupy Pedophilia’ anti-gay vigilante website.
The decision was revealed in CalPERS’ internal corporate governance documents and confirmed by a fund spokesperson.
The giant fund, the largest in the US, based its decision on research on the companies it requested from research provider MSCI, which found they both warranted ‘red flag’ status.
“The reason was information relating to both companies and affiliates of the companies investing in a website, which hosts a neo-Nazi group called ‘Occupy Pedophilia’,” the fund said in its latest Global Governance Program Quarterly Update.
Occupy Pedophilia members are alleged to have lured gay and transsexual youth to abusive encounters through fake social media profiles before posting the encounters online.
Citing CalPERS’ principles-based approach to emerging markets investment, a fund spokesperson told RI: “Based on the MSCI re-assessment and conclusion that both are ‘red flags,’ per our existing emerging equitymarkets principles policy, we have excluded both from our portfolio.”
Mail.ru, which is domiciled in the British Virgin Islands, is a leading Internet provider in Russia; co-founder and CEO/Chairman Dmitry Grishin has been likened to Facebook’s Mark Zuckerberg. The company has been listed on the London Stock Exchange since 2010.
Moscow-based MegaFon is the second largest mobile phone operator and the fourth largest telecom operator in Russia. Former UK Treasurer Minister Lord Myners, one of the most influential figures in institutional investment, has been on its board as an independent director since March 2013, chairing the remuneration committee.
Nordic telecoms firm TeliaSonera has a stake of just over 25% in MegaFon. The company has just 14.7% of its shares in free float. Neither company responded to requests for comment.
The exclusions come as CalPERS is proposing to amend its Global Principles of Accountable Corporate Governance at a meeting next week.
The revision will focus on governance issues such as directors’ tenure and responsibilities. The fund’s Investment Committee is also considering a series of changes to its equity compensation principles.