US schemes vow to punish poor corporate practice
US- A core group of pension funds, led by those from California, New York and North Carolina, have agreed to clamp down on companies that do not abide by good company practice following the corporate scandals of firms such as Tyco, Enron and WorldCom.
At a meeting in New York yesterday the pension funds, which have a combined $1trn under management, were united in their decision to take a stand. At the meeting, Californian treasurer Phil Angelides put forward the case for divesting in companies operating through offshore tax havens.
Angelides, also a board member of US’s largest public pension fund, CalPERS, and its sister fund CalSTRS, said most fund leaders at the meeting were opposed to investing in such companies.
The funds have yet to sell any holdings and will act individually as they see fit. CalPERS and CalSTRS have stated that they will discuss the issue in the next two months.
“Corporations in America need to know that we will take our business elsewhere. We are the investors, we are the owners and we expect a better code of conduct,” said Angelides after the meeting.
Between them the funds have lost hundreds of millions of dollars in the WorldCom scandal. Last month CalPERS, CalSTRS and LACERA, the $26bn fund for Los Angeles county employees began legal proceedings in an attempt to recover losses of $318.5m against WorldCom executives and underwriters of WorldCom bonds issued in May of last year.