With Social Issues in the Business Mix, Life Is a Lot More Interesting (Archive)
In the United Kingdom, where I have spent much of the past year, shareholder activism is not nearly as common as it is in the United States, but on one issue – animal rights – no other country in the world can match the Brits for their ferocious attacks on companies which test drugs on animals. They recently targeted a drug-testing company, Huntingdon Life Sciences, and almost drove it into bankruptcy.
Huntingdon is Europe’s largest contract research organization – and animal lovers hate it with a passion. Its offices are protected by barbed wire and guard dogs. Protestors stand outside the gates and shout “animal killer” at anyone who enters. Nor do they stop there. Employees of Huntingdon are assaulted with threatening letters and phone calls; several have had their cars firebombed.
And this has been a very successful campaign. In January, the Royal Bank of Scotland actually wrote off an outstanding loan it had made to Huntingdon. To get the animal rights protestors off its back, the bank agreed to accept $1.50 so that it could wipe the $34 million loan off its books.
Britain’s largest bank, Barclays, also caved in. It has a brokerage unit that holds shares in nominee accounts for customers who do not want to take possession of stock certificates. Barclays said it would no longer do so for holders of Huntingdon shares – they were given three months to have their names put on the shares or move their accounts elsewhere. Barclays said that it took this action because it could not “guarantee the safety” of its employees. Other financial institutions which have cut their ties with Huntingdon include HSBC, Credit Suisse First Boston, Citigroup and Merrill Lynch.
To arrange new financing, Huntingdon went to the Arkansas investment bank, Stephens, which came up with a rescue package. Watch soon for the picket lines in Little Rock.
On quite another note, French companies are taking it on the chin as a result of a bill signed into a law by President Jacques Chirac. The law recognizes as genocide the slaughter of Armenians in Turkey during the last days of the Ottoman Empire in World War I. Personally, I welcomed the French action. One of the most memorable books of my childhood was Franz Werfel’s novel, “The Forty Days of Musa Dagh,” which was based on the brutal killing of an estimated one million Armenians in 1915. Although the genocide has been widely documented, Turkey has always denied that it took place.
As soon as France passed this new law, Turkey began to penalize French companies. Two French companies were excluded from bidding on a $40 million contract to buy Turkish wheat; a $200 million contract with Dassault Aviation to upgrade electronic systems on 80 Turkish F-16 warplanes was canceled; an international consortium of companies that had signed on to build a $1.4 billion highway and bridge or tunnel crossing over Izmit Bay in northwestern Turkey was told that its contract was being canceled because two French companies were involved; Alcatel, the giant French telecommunications company, was denied an opportunity to provide the technology for a cellular phone network. The Turks also said they would strip streets of French names.
Talk to any Armenian and you will find that he or she carries in his or her head the stories of this slaughter told to them by their families, stories that are as horrific as those detailing the Jewish holocaust in World War II. Companies ought to be boycotting Turkey instead of the other way around, especially since the country continues its long suppression of the ethnic Kurds who constitute 15% of its population. slaughter told to them by their families, stories that are as horrific as those detailing the Jewish holocaust in World War II. Companies ought to be boycotting Turkey instead of the other way around, especially since the country continues its long suppression of the ethnic Kurds who constitute 15% of its population.