Norway fund plans to more than double investments in Saudi Arabia

Norwegian sovereign wealth fund (SWF) CEO Yngve Slyngstad in this 2017 file photo. (Reuters/File Photo)
Updated 26 October 2018
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Norway fund plans to more than double investments in Saudi Arabia

  • Norway's sovereign wealth fund, the world's largest, plans to more than double its investments in Saudi Arabia
  • The fund currently has Saudi Arabian assets worth $825 million

OSLO: Norway's sovereign wealth fund, the world's largest, plans to more than double its investments in Saudi Arabia after it is included in the fund's reference index soon, Chief Executive Yngve Slyngstad said on Friday.
The fund currently has Saudi Arabian assets worth 6.9 billion crowns ($825 million), spread over 42 companies including banks, petrochemicals and healthcare firms.
The fund's reference index, the FTSE, will include Saudi Arabia in the coming year.
"We invest in companies, not countries. Our investments in companies based in Saudi Arabia will not be changed based on political developments," Slyngstad told Reuters.
"Generally speaking, we are not set up to assess political risk."
Earlier, the $970 billion fund said it would ask the 9,000 companies in which it invests to ensure their board members had sufficient expertise, time and independence.
The fund, which funnels Norway's revenues from oil and gas production, owns 1.4 percent of all globally listed shares. It has in recent years become a more active shareholder as it has grown in heft.
While some of the demands put forward on Friday are not new for the fund - such as opposing CEOs who sit as chairs of their companies - others are, such as requiring industry expertise from directors.
A majority of independent board members should have "fundamental industry insight" and at least two of the independent members should have worked in the company's industry, said the fund.
"It is really ... industry expertise which is an issue that has been under-communicated from investors," said Slyngstad. "The strong desire to have a profitable company by having a board who knows the business."
He declined to name specific sectors where he thought board industry expertise was lacking, but said: "There has been a focus on the financial sector, also from regulators, which we will reinforce from our point of view.
"But this is a broader issue than just the financial sector," he added. "We have seen quite differing practice in different sectors and different countries.
"This is a signal that ... we will try to look at these issues more quantitatively, to see where we can find the major issues with regards to countries and sectors."
The position papers will form the basis of the fund's position for how it votes on the boards of companies.
"It will be a starting point for how we will vote," Chief Corporate Governance Officer Carine Smith Ihenacho told reporters earlier.
Asked whether the fund would divest from reluctant companies, on these issues, she said: "It will be a basis for voting, dialogue and engagement."
Directors should also ensure they have enough time to fulfil their obligations to the boards on which they serve, said the fund.
In practice, that means board members of listed companies should not serve on more than five boards at one time and the chair of a leading company should generally not chair the board of another company, it said.
In the third quarter, the fund made a return of 2.1 percent, helped by rising North American stocks. It still returned 0.2 percentage points less than the a benchmark index set by the Norwegian Finance Ministry.
"The market development was affected by expectations of differing economic growth and uncertainty about the effects of increased trade barriers," Slyngstad said.


Unaoil’s former Iraq partner pleads guilty to bribery

Updated 26 min 49 sec ago
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Unaoil’s former Iraq partner pleads guilty to bribery

  • It is the first guilty plea to result from a three-year investigation by the Serious Fraud Office into suspected bribery and money laundering
  • Unaoil is a Monaco-based oil and gas firm

LONDON: The former partner in Iraq for Unaoil, a Monaco-based oil and gas consultancy, has pleaded guilty to five counts of bribery in the first conviction in a three-year criminal investigation by Britain’s Serious Fraud Office (SFO).
Basil Al Jarah, 70, pleaded guilty on July 15 to conspiring to give corrupt payments in connection with the award of contracts to supply and install single point moorings and oil pipelines in southern Iraq, the SFO said.
Al Jarah’s conviction, which comes six months before three other defendants in the case face a criminal trial in London, was announced after a judge lifted reporting restrictions in a pre-trial hearing on Friday, the SFO said.
Ziad Akle, Unaoil’s former territory manager for Iraq and Stephen Whiteley and Paul Bond, who worked for Dutch-based oil and gas services company SBM (Offshore), have pleaded not guilty.
Akle, 44, has been charged with three offenses of conspiracy to make corrupt payments. Bond, a 67-year-old former senior sales manager with SBM (Offshore), and Whiteley, a 64-year-old former vice president of SBM (Offshore) and one-time Unaoil general territories manager for Iraq, Kazakhstan and Angola, each face two counts.
Sam Healey, a lawyer at JMW Solicitors who is representing Whiteley, said his client “strenuously denied” all alleged offenses.
“Mr Whiteley co-operated fully with the SFO as they opened their enquiries and will rigorously defend the charges,” he said.
Lawyers for Al Jarah and Bond declined to comment. A lawyer for Akle was not immediately available for comment.
A spokeswoman for Unaoil declined to comment, while SBM Offshore has said it is company policy to not comment on past or current employees.