BUSINESS WEEK: FSA LOOKS AT SHELL EMAILS
By Alan Lodge
Apr 29 2004
Posted 30 April 04
Probe into oil giant after `lying’ revelations
THE Financial Services Authority has launched its own probe into oil giant Shell.
The move comes after it emerged former executives had lied about the company’s oil and gas reserves for many years
Last week the firm announced an internal investigation had shown investors had been misled about the company’s position and the company had overstated its reserves – a figure used by analysts and investors to value the company – by 20 per cent.
The North Colonnade-based watchdog started a formal investigation last Friday (April 23). It said it has been conducting inquiries and gathering and analysing evidence.
Shell’s announcement led to the departure of chairman Sir Philip Watts and exploration director Walter van der Vijver.
The FSA is to investigate a series of emails between the pair that suggest the company was lying to investors.
The FSA is likely to further scrutinise further correspondence between Shell bosses which admit to “lying” over the state of the company’s reserves.
Shell’s Auditor KPMG – which has offices in One Canada Square – is braced for some tough questions from US regulators in light of the Shell revelations.
KPMG will be expected in the coming weeks to justify its work to the Securities & Exchange Commission, the top US financial regulator. The firm is joint auditors for the oil firm along with PwC.
Regulators want to be satisfied that with two auditors involved, problems were not assumed to be the other side’s responsibility.