Sudan proposal fails at American Funds

BOSTON (Reuters) - Shareholders of 16 American Funds products on Tuesday soundly defeated a nonbinding proposal to pull investments from companies doing business in Sudan.

Votes opposing the measures totaled more than 80 percent of votes cast at each of the funds, with votes in favor ranging from 8.5 percent to 11.8 percent, said Chuck Freadhoff, spokesman for the investment adviser to the funds, Capital Research and Management Co.

Activists had put the measures on the mutual fund company's ballot as part of a broader campaign to pressure several Chinese oil companies whose royalty payments the activists say prop up Sudan's central government, blamed for human-rights violations in the country's western Darfur region.

Managers of American Funds had opposed the proposals, saying such decisions were best handled as part of the funds' regular investment process.

The votes in favor were about half of what similar measures garnered at several other U.S. fund companies this year.

Last week at Putnam Investments, for instance, Sudan proposals received 24 percent and 21 percent of votes cast.

Activists, led by Boston-based Investors Against Genocide, had complained that the American Funds vote was marred by an abridged ballot that did not properly describe the measure, and by poor telephone-poling procedures.

American Funds had responded that the ballot question was spelled out in a proxy statement mailed to shareholders.

Separately, investors passed other ballot measures making administrative changes to a total of 30 funds. In two cases, not enough votes were cast; those ballots have been rescheduled to December 23.