KUALA LUMPUR (June 16): IJM Corp Bhd was reincluded in Norway's Government Pension Fund Global's portfolio on Wednesday (June 15, 2022) after the executive board of the fund's manager decided to revoke the exclusion of builder IJM Corp after the company divested its stake in its plantation business in 2021.

"The company has been excluded since 2015 due to unacceptable risk that the company is responsible — through its activities in palm oil plants in Indonesia — for serious environmental damage. Since the activities on which the exclusion was based have terminated, there are no longer grounds for excluding the company.

"The decision is based on a recommendation from the [Government Pension Fund Global's] Council on Ethics of May 5, 2022," said Norges Bank Investment Management, which manages the Government Pension Fund Global, the world's largest sovereign wealth fund with a market value of about 11.7 trillion Norwegian kroner (about RM5.2 trillion).

Norges Bank Investment Management is the asset management unit of Norwegian central bank Norges Bank, according to the group's website.

Norges Bank Investment Management's Wednesday (June 15, 2022) statement included a statement by the Government Pension Fund Global's Council on Ethics.

The council said in its statement on Wednesday that in 2021 IJM Corp divested its stake in its plantation business and is no longer involved in the development and operation of plantation.

"The Council on Ethics therefore considers that the grounds for exclusion no longer exist. The Council on Ethics recommends that the exclusion of the company IJM Corp from the Government Pension Fund Global be revoked," the council said.

Looking back, the council said that in 2014 it recommended to exclude IJM Corp from the Government Pension Fund Global due to the risk of the company being responsible for severe environmental damage through its conversion of tropical forest into oil palm plantation.

"At the time, the company was developing plantations in lowland rainforest in East Kalimantan, Indonesia. The council emphasised that the company seemed not to have implemented measures to reduce the loss of biodiversity," the council said.

According to IJM Corp's Bursa Malaysia filings, IJM Corp has sold its entire 56.2% stake in IJM Plantations Bhd to Kuala Lumpur Kepong Bhd (KLK) for RM1.53 billion or RM3.10 a share.

IJM Corp, which initially announced the transaction with KLK on June 9, 2021, said the IJM Plantations stake disposal was completed on Sept 6, 2021.

On Thursday (June 16, 2022), IJM Corp's share price closed down three sen or 1.73% to RM1.70 for a market value of about RM5.95 billion, based on the company's latest-reported number of issued shares at around 3.5 billion.

IJM Corp's latest-reported net assets per share stood at RM2.81.