Dong Feng, owners of a Chinese truckmaker in which Volvo recently purchased a 45 percent stake, has been blacklisted by a major Swedish state pension fund for allegedly violating a United Nations weapons embargo.
Sweden’s Seventh AP fund, as well as Norway’s oil fund, blacklisted Dong Feng because the company sold military equipment to countries currently under a UN weapons embargo, Sweden’s TV4 news reported on Monday.
“They are really the wrong partner for Volvo,” Anna Ek, head of the Swedish Peace and Arbitration Society (Svenska Freds- och skiljedomsföreningen) told TV4.
At the weekend, officials at Volvo AB hailed the 5.8 billion kronor ($900 million) deal as a “fantastic opportunity” for the Swedish truckmaker to take a leading position in China and in the global market for heavy trucks.
According to Volvo CEO Olof Persson the partnership was “the best of both worlds”, calling Dong Feng “a partner we know well”.
Volvo claimed the deal made it the largest manufacturer of large trucks.
The blacklisting by Sweden’s Seventh AP fund means the pension fund won’t be allowed to purchase any shares of Dong Feng.
However, there are no current plans to review the fund’s holdings in Volvo following the deal.
“We’ve told them what we think and they have told us that they don’t work like that any longer,” Volvo spokeswoman told TV4.
Source: The Local