the PetroChina IPO, citing human rights concerns.
reported, as of April 2000, that the AFL-CIO had convinced investors controlling nearly$1 trillion in assets to put out statements saying that they would not participate in the deal:So far, major funds shunning the IPO include Vanguard, CalPERS, TIAA-CREF (the $250 billion teachers' pension fund), and the public employee pension funds of New York City, NewYork State, and California. "The larger question is how safe an investment is in countries that donot have freedom or democracy," says California State Treasurer Philip Angelides, who sits onthe board of the $172 billion CalPERS.
The size of the PetroChina IPO was reportedly cut back from $10 billion to $5 billion, and ended upcoming in under-subscribed, at $2.89 billion.
3. To reassure investors, Hormats told journalists that the IPO would not fund work in Sudan.
As opposition intensified in early 2000, Robert Hormats, vice chairman of Goldman SachsInternational, began telling members of the press that money raised through the PetroChina IPO wouldnot fund work in Sudan and that there were "firewalls" in place to ensure that IPO funds would only beused domestically.Hormats offered these assurances on at least four occasions, and was the only Goldman Sachsexecutive to do so:
Wall Street Journal
, 1/14/2000: "Sudan should not be an issue because of extensive legalfirewalls in place to ensure that IPO proceeds are used domestically in China," said RobertHormats, vice chairman of Goldman Sachs International.
1/24/2000: "It's not an issue because of the extraordinary steps the company istaking to ensure IPO proceeds are only used domestically,'' says Goldman Sachs InternationalVice-Chairman Robert D. Hormats.
1/27/2000: "The structure of the deal emerging should mean that Sudan is notan issue because of the safeguards ensuring all the funds raised here will be used domestically,"said Robert D. Hormats, Goldman Sachs International vice chairman and a former NationalSecurity Council and State Department official. "PetroChina will be a purely domesticcompany."
, 2/14/2000: "No one is saying there aren't problems there" in Sudan, says RobertHormats, vice chairman of Goldman Sachs International and a former assistant secretary of State. "But . . . this particular transaction should not be affected by concerns about Sudan or
3 "Chinese Fought on NYSE Listing; Groups Cite Oil Firm's Role in Sudan,"
January 27, 2000.4 "PetroChina: Pouring Oil on the Flames,"
, April 3, 2000.http://www.businessweek.com/archives/2000/b3675161.arc.htm5 "PetroChina Hopes to Shake Off Its Past --- As Big Stock Offer Looms, Beijing Hopes Oil Giant Can Shed PoliticalRoots,"
Wall Street Journal,
January 14, 2000.6 "Can this Giant Fly on Wall Street?",
, January 24, 2000.