Canada's Scotiabank asks group to end campaign seeking Elbit divestiture
28/11/2023 22:39
By Nivedita Balu
TORONTO, Nov 28 (Reuters) - Bank of Nova Scotia BNS.TO
has asked an advocacy group to end a campaign demanding the
Canadian lender divest from Israel-based weapons manufacturer
Elbit Systems ESLT.TA , accusing the campaign of spreading
misinformation and saying protesters endangered staff and
customers safety, according to an e-mail seen by Reuters.
Scotiabank's 1832 Asset Management mutual fund is the
third-biggest shareholder in Elbit with about a 5.04% stake in
the $9.4 billion company, according to LSEG data.
Scotia's exposure to the weapons maker has triggered a
number of protests at the bank's branches in recent weeks. It
also disrupted Canada's prestigious Giller Prize Gala on Nov.
14, a literary award sponsored by Scotiabank. Toronto Police
said they arrested three protesters.
Corporate accountability organization Eko launched the
campaign last year and has now collected about 15,000
signatures. It claims in its petition that Scotiabank is the
biggest foreign shareholder in Elbit, whose weapons were heavily
used during Israel's 11-day operation in Gaza in May 2021. The
campaign has gained more attention during the recent
Israel-Hamas conflict.
A senior Scotiabank executive said in an email dated
last Friday that Eko's petition contained misinformation which
caused "confusion and disturbances" that included "anti-Israel
protests" at the bank's main branch in Toronto resulting in the
closure of its offices, inability to serve clients and
culminated in "hate speech being chanted in our branch, prior to
police intervention."
The email said Scotiabank was "not the biggest
shareholder of Elbit, nor is it the biggest foreign shareholder
of Elbit. Shares in Elbit are held by mutual funds managed by
our asset management arm, which in turn are held by unitholders
of those fund."
The executive said in the email that employees and
clients have become concerned about safety due to vandalism and
protests at its branches.
Scotia did not offer immediate further comment on the email.
Eko said it would not comment on the protests at Scotia branches
and has not taken part in the protests.
"After carefully considering Scotiabank's request for Ekō to
take down our petition due to misinformation, a request I have
never received in my ten years as a digital campaigner, we have
decided to keep the petition up," Eko's Angus Wong said.
Addressing the allegations of misinformation, Wong insisted
that Scotiabank had "500 million dollar ownership of a notorious
weapons company." The group on Tuesday did revise its petition
to add Scotiabank's explanation of the mutual fund ownership
stake and said the bank asked it to take down the petition.
The bank, under Scotia Global Asset Management, holds
about 3,200 equity securities in total and Elbit is just one of
those securities and is held in 14 of its over 200 mandates. Its
Elbit exposure represents less than 0.3% of total asset under
management across 1832 Asset Management.
The Vanguard Group and BlackRock Institutional Trust company
respectively own 1.8% and 1.2% stake. Norway's sovereign wealth
fund in 2009 dropped Elbit saying it did not "wish to fund
companies that so directly contribute to violations of
international humanitarian law."
Elbit, one of Israel's largest defence contractors, on
Tuesday said it boosted production to help supply Israel's
military during the country's war with Hamas, after reporting
higher quarterly profit.
"Following the brutal attack on Israel, the outbreak of war
on the 7th of October and the increase in demand for our
solutions by the Israel Ministry of Defence, Elbit Systems has
ramped up its production in support of the Israel MOD and
Israel's security forces," said CEO Bezhalel Machlis.
Its stock is up about 33% this year.
(Reporting by Nivedita Balu in Toronto
Editing by Denny Thomas and David Gregorio)
((Nivedita.Balu@thomsonreuters.com; X: @niveditabalu;))