UK: Rowntree dumps its Reed shares

Two investors in Reed Elsevier have sold their shares as a protest that the publishing giant runs arms fairs which have included the sale of torture equipment.

F&C Asset Management and the Joseph Rowntree Charitable Trust sold their holdings after concerns about the companies selling equipment at Reed's fairs.

Reed Exhibitions, runs the UK's arms fair, Defence Systems and Equipment International (DSEi).

It is also responsible for the Shot Show in the US and recently bought the rights to organise the IDEX fair, which markets itself as "the world's largest and fastest growing defence exhibition". IDEX kicks off on Sunday in Abu Dhabi.

Security Equipment Corporation and Stinger Systems have been exhibitors at the annual Shot Show in the US. At the 2006 show Security Equipment Corporation sold stun guns. The company's tagline is "Making grown men cry since 1975". Stinger sold stun belts which are operated by remote control. Such equipment is legal in the US, but in 2005 the European Union prohibited exports and imports of devices which "have no practical use other than for the purpose of capital punishment, torture and other cruel, inhuman or degrading treatment".

Joseph Rowntree, founded on Quaker principles, sold £2m of Reed shares yesterday. Friends Provident sold all the Reed shares in its ethical "stewardship" fund.

Karina Litvak, head of governance at F&C, said the fund manager had probed Reed after last year's DSEi fair but had not been satisfied with the efficacy of the company's systems for ensuring exhibitors were properly vetted.

Reed, said: "Our portfolio of defence shows accounts for less than 1pc of total Reed Elsevier revenues." It added that its trade shows "all strictly comply with national and international laws and regulations".

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