World's biggest wealth fund puts Japan's Kirin on watch list

Oslo

THE Norwegian central bank said on Wednesday it had put Japan's Kirin Holdings on a watch list for possible exclusion from its US$1.3 trillion sovereign wealth fund over the beverage giant's business ties to Myanmar's military.

Kirin said on Feb 5 that it would end its partnership with Myanma Economic Holdings Public Company Limited (MEHPCL), a company run by Myanmar's army, after a military coup deposed the democratically elected government.

As part of its decision on whether to maintain its ownership in Kirin, the Norwegian fund will monitor the implementation of the company's plan to end the ties, Norway's central bank said in a statement.

Kirin's decision effectively scraps the Myanmar Brewery joint venture, in which the Japanese firm's controlling stake was valued at up to US$1.7 billion, although Kirin also said it still wanted to keep selling beer in Myanmar.

Norges Bank Investment Management (NBIM), which manages the world's largest sovereign wealth fund, held a 1.29 per cent stake in Kirin Holdings at the end of 2020 with a value of US$277.1 million.

"We remain focused on urgently implementing the termination of our joint venture partnership with MEHPCL," Kirin said in an e-mailed statement to Reuters.

"As part of this, we hope to find a way forward that will allow Kirin to continue to contribute positively to Myanmar. We value opinions and feedback from all of our stakeholders and are open to constructive engagement on this matter," it said.

The Norwegian sovereign fund, formally called the Government Pension Fund Global and set up in 1996 to save petroleum revenues for future generations, owns about 1.5 per cent of all globally listed shares. REUTERS