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Nortel sells its Burmese interest, removing international concern
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Nortel Networks, regarded as a problem company by some socially responsible investors, has sold its interest in a company involved in Burma, lifting a major concern by investors on one of Canada's stock market stars. On Sept. 14, corporate social research company Michael Jantzi Research Associates (MJRA) issued a bulletin to its clients confirming that Nortel has sold its interest in Telrad, an Israeli company that supplies telephone exchange equipment, cables and telephones to the Burmese government telephone agency. Burma is under international sanctions and a boycott because of human rights abuses by its military dictatorship. As a result, many socially responsible investors have avoided Nortel in spite of its huge weight on the Canadian equity markets and its significant share price increase during the last few years. In its bulletin, MJRA said the company signed an agreement with an Israeli holding company, Koor Industries Ltd., under which Nortel agreed to sell its entire 20% interest in Telrad to Koor (which already owned the other 80% of the company). The deal was completed on Sept. 3. "Given Nortel's sale of its ownership in Telrad, as well as its assurances that it did not and will not acquire any contracts with Burma through the recent transaction, MJRA has removed the international concern from its profile of Nortel," said MJRA. "To clients whose investment guidelines include a Burma screen MJRA recommends that Nortel no longer be considered ineligible on the grounds of any involvement in Burma." "We don't know if Nortel was motivated by its desire to avoid the regime in Burma," said Eugene Ellmen, Executive Director of the Social Investment Organization, "but we commend Nortel for divesting of its interest in a country facing international sanctions for its human rights atrocities."
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