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Swedish pension investors divest Lundin Petroleum over Sudan links

UN PRI signatories at odds with oil exploration company

Swedish UN Principles for Responsible Investment signatory, pension provider and insurer AMF, has followed its peer Folksam in selling its stake in Lundin Petroleum over allegations that the oil exploration firm was involved in human rights abuses in Sudan.

Lundin vehemently denies the allegations.

AMF had held 7m shares in Lundin, worth SEK910m (€103m). Just three weeks ago, Folksam divested a shareholding worth SEK490m, while the Swedish retail trade union sold its SEK3m stake.

The sell-offs follow Lundin’s flat rejection of an independent enquiry to determine whether the firm bore any responsibility for human rights abuses in connection with oil exploration in Sudan between 1997 and 2003.

Folksam had tabled a motion calling for an independent enquiry during Lundin’s general meeting on May 10 – which gained 22% shareholder support. Folksam said it was partly motivated by a separate probe into Lundin’s African activities by Swedish public prosecutor Magnus Elving.

“Overall, we believe that the company has disqualified itself from being a possible investment regardless of the share’s future potential,” an AMF spokesperson told Responsible Investor.Lundin has countered the allegations. In March, Lundin’s two sons published an opinion piece in a Swedish newspaper defending their father.

“The allegations which have been directed against Adolf Lundin and other members of the family and the men and women working in companies within the Lundin group are simply unfounded, unfair and in some cases, even absurd,” Lukas and Ian Lundin wrote.

Then shortly before the annual meeting, current Lundin CEO Ashley Heppenstall issued an ultimatum, saying shareholders should “trust us or sell your shares”.

“The company has disqualified itself from being a possible investment”

Losing critical shareholders did not appear to concern Heppenstall. “As long as we can continue to deliver, there will be shareholders that support the company,” he said.

Carina Lundberg Markow, head of responsible investment at Folksam, shot back by telling Swedish daily Aftonbladet that “at the end of the day, Lundin is going to get the owners it deserves. When the final difficult owner leaves, there won’t be anyone left to pose critical questions.”

AMF and Folksam are two of Sweden’s biggest life insurers and private pension providers, managing SEK372bn and SEK280bn respectively.