Shares of Indorama Ventures Plc (IVL) took a hammering this morning after a report came out that the company was among the 112 companies named by the United Nations (UN) Human Rights Office as operating in the illegal Israeli settlements.
Shares of IVL opened down more than 7.5 per cent at the start of the trading session but recovered later to trade down by as much as 4 per cent, despite IVL coming out to say that it had in December last year already had a board meeting where they had decided to move the operations out of the West Bank to an operation in Israel.
At midday the shares were trading at 30.00 baht, down 1.25 baht or 4 per cent from their closing price on Thursday. So far in 2020, shares of IVL have declined by 14.29 per cent amid uncertainties in the global markets.
IVL in a statement to the Stock Exchange of Thailand (SET) said that its subsidiary – Algol Industries 1953 Ltd., which is operating on a leased property in the West Bank, had, at its board of directors meeting in December 2019, decided to move the operations in Israel as the lease on the current production site was set to expire by the end of 2020.
Avgol, which IVL acquired in 2018 for just over US$700 million, has been operating to help IVL gain a better hold on its vertical fibres business segment.
The announcement by the UN Office of the High Commissioner for Human Rights (OHCHR), which lists firms linked to illegal Israeli settlements, was hailed by Palestinian leaders as a critical step towards boycotting Israeli businesses operating in the occupied West Bank.
The list is dominated by 94 Israeli companies and international firms from six countries including the US, France, the Netherlands, Luxemburg, and Thailand. The list includes Airbnb, Expedia, TripAdvisor, Motorola, General Mills, and IVL, which is headquartered in Bangkok.
IVL is engaged in specific activities related to Israeli settlements in the occupied Palestinian territory, in particular with respect to the exploitation of natural resources like water sources and lands.
According to marketscreener.com, IVL, whose founder is Indian businessman Aloke Lohia, reported on May 13, 2018 that IVL acquired a stake in Avgol Industries 1953 Ltd., an Israel-listed global manufacturer located in Barkan Industrial Zone in the West Bank.
The UN’s report includes IVL among its 112 blacklisted firms as it is a parent company of Avgol Industries 1953 Ltd, which is also on the UN’s blacklist report.
Analysts said that the move is insignificant to its operations and that IVL remained a good buy for investors.
“IVL’s share price dipped 7.5 per cent this morning before recovering as retail investors got scared on news that the company had been included in a list compiled by the UN of companies with business ties to illegal Israeli settlements in the occupied West Bank,” a broker said in a report.
“The list doesn’t make the businesses illegal but could possibly trap their businesses in a political fight between Israel and Palestine over their legal status to operate such business. IVL has one subsidiary, Avgol, which represents under 1.5 per cent of IVL’s total capacity. IVL has announced to immediately move its operations out of the conflicted zone,” the broker added in a note to clients.
* Correction: This article previously misstated that the report was a Human Rights Council report. The report was in fact an Office of the High Commissioner for Human Rights report.