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UNOFFICIAL TRANSCRIPT BBC2 TV “THE MONEY PROGRAMME” BROADCAST 15 JULY 2004, 9.50pm: SHELL RESERVES SCANDAL

Stanley Bernstein, New York Class Action Lawyer: “There are a lot of investors and many maybe more investors that were affected by this fraud than any other fraud in history”

SHELL2004.com: UNOFFICIAL TRANSCRIPT BBC2 TV “THE MONEY PROGRAMME” BROADCAST 15 JULY 2004, 9.50pm: SHELL RESERVES SCANDAL

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All text is narration unless otherwise indicated.

Money Programme theme music

Introduction: One of the world’s oldest and biggest companies is engulfed in scandals… its tarnished the reputation of British business

Unidentified Shell shareholder interviewed at Shell Transport London AGM: “the board should be fired”

The oil giant Shell has been forced to admit that it exaggerated the amount of oil it had in reserves – a deceit that has left millions of pension holders and investors out of pocket

Stanley Bernstein, New York Class Action Lawyer: “There are a lot of investors and many maybe more investors that were affected by this fraud than any other fraud in history”

When the truth emerged shares plummeted and company chairman Sir Philip Watts was forced to resign in disgrace

BBC Reporter Rajan Datur: Question to Sir Philip into getting into his car: “Can you tell us why you did not heed colleagues’ warnings about the true state of Shell’s oil reserves please?”

He and others face tough questioning and the prospect of prosecution

Tonight the Money Programme lays bear the biggest corporate scandal to hit Britain in recent history

It’s a story which has left the financial world in a state of Shell shock

Title appears: SHELL SHOCK

For the chairman of Shell Sir Philip Watts, Friday January 9th 2004 was the worst day in his business career

As dawn was broking over the City of London that morning his public relations team were preparing to drop a bombshell

Shell released a surprise statement which popped up on the wires and screens of unsuspecting news rooms

Even oil industry experts were caught unawares

Jim Washer Editor, International Petroleum Finance: “There was a press release that had come out very early in the morning to the stock exchange and I have to admit that when I first looked at it I was not quite sure of the significance of it”

Jim Washer wasn’t alone. The announcement was couched in obscure jargon but after a few seconds the truth dawned on Jim

Shell was owning up to falsely exaggerating the amount of their oil reserves by an astonishing 20%. The company had misled the world.

Jim Washer: “The basic affect was one of real surprise and horror and you simply wouldn’t expect this kind of mistake to be happening at a company like Shell”

It was a shocking ad unprecedented confession from a company that until then had been seen as a paragon of trust and integrity

Jim Washer: “It became clear once we saw what was happening with the share price that this was a very big deal”

Shell slashed its official proven oil reserves from 20 to 16 billion barrels a readjustment that sent investors into panic

Rajan Datar to camera: “Now the amount of reserves an oil company can prove it possesses is a key influence on how attractive that companies shares are and ultimately therefore the share price. Suddenly investors realised that they had bought shares under false pretences. Basically they had been sold a lie.”

The City was in turmoil. Investors were rushing to sell. Within an hour of the stock market opening shares in Shell had plunged 8% wiping nearly £3 billion pounds from the value of investment in the company. The biggest investors in the city are insurance and pension funds so the biggest losers are ordinary people.

Peter Montagnon, Association of British Investors: “Most people will have a stake in this if they’ve got a pension because Shell is such a large company that if you’ve got a pension pot the chances are some of it is in Shell. So when you have an announcement like this the value of your pension pot of everyone’s pension pot is reduced accordingly”

Shock waves reverberated around the financial world especially in the USA. Oil analyst, Fadel Gheit, based in New York had been advising his clients to spend millions on Shell shares

Fadel Gheit, Oil Analyst: “You travel anywhere around the world you see the Shell sign you are not going to confuse it with any other brand you know what it is you know what it stands for – it stands for quality it stands for service”

But after January 9th that all changed

Fadel Gheit: “Basically Shell dropped a bombshell. They told investors that we embellished on the numbers.. that we exaggerated the numbers basically we lied to you”

The buck stopped with the chairman Sir Philip Watts, a Shell employee for over 35 years and Fadel Gheit is in no doubt that the buck started with him too

Fadel Gheit: “Phil Watts is responsible I would say 70 or 80% would just be his doing alone”

Later that morning on London’s South Bank, Shell staged a teleconference with journalists and analysts. The company was trying to limit the damage to little avail. Shell was bombarded with angry questions from a hostile press.

And where was Sir Philip when the flak started to fly that day?

(Video film reconstruction of Sir Philip supposedly wondering around his Berkshire garden)

Universally panned as an appalling communicator, Watts left his PR team to bear the brunt of investors’ fury. According to one perhaps mischievous report, he was at home pursuing his hobby, building a Japanese Garden.

Peter Montagnon: “What should not have happened is what did happen was that they left it to someone lower down the chain and tried to make it what seemed like a routine announcement but actually it took billions off the value of the company”

Fadel Gheit: “It’s like a Captain in a ship you do not abandon the ship in a crisis”

Eventually Watts deigned to appear on national TV to apologise

Sir Philip Watts TV clip from BBC News 5th February 2004: “I’m distressed and disappointed for my shareholders that this has happened but now we are in the process of fixing it and putting it right”

It was too late. Watts’s reputation was up in smoke and after a century of steady growth so was Shell’s.

The story of one of the world’s most revered companies began in 1907 when a Dutch firm selling oil and petrol merged with an English gifts business that sold Shells. The Dutch firm was partly owned by the nation’s Royal family. It was a strange marriage which created Royal Dutch Shell.

Royal Dutch had greater experience of exploration production and refining. Shell more of distributing and selling the product of the day.

Shell exploited the 20th Centuries rapidly growing demand for oil scouring the planet for the black gold which fuelled industrial expansion all over the world.

The company was keen to promote a wholesome image of good value and sound principles. At the turn of the century the company coined one of the greatest advertising slogans of all time: YOU CAN BE SURE OF SHELL

In 1969 a certain Philip Beverly Watts joined Shell as a seismologist.

(video of semi-detached house)

His was not a privileged background. This modest semi outside Leicester was his birthplace. He studied at Leeds University. Phil Watts was a driven man. His colleague at Shell, Dr Andrew Armour was a good friend of the blunt no nonsense Watts.

Dr Andrew Armour: Phil comes from a pretty ordinary background up in the North a bit like my own and maybe that was part of the appeal kindred spirits and all that…

After leaving university Phil Watts, a practising Christian, gave up a year of his life to teach in Africa under the voluntary services overseas scheme.

He was an altruistic young chap

Dr Andrew Armour: It was reasonably well known that Phil would give a portion of his salary to charity he never boasted about it at all.. it was not something you got to find out about unless you were a close friend

Phil Watts’s determination and his apparent integrity propelled him up the company hierarchy. By the early 90’s he was head of Shell’s massive operation in Nigeria. By that time Shell was the biggest oil company on earth and determined to keep it that way.

The corporate video boasted: “Despite new national companies encroaching on the market we held on to first place way ahead of the competition.

But the industry was facing a huge obstacle. Oil was becoming ever harder to find. Shells closest rivals BP and Exxon solved the problem simply. They bought other big oil companies and with them their reserves.

But Shell didn’t join in the merger mania. The firm slipped to third place behind its rivals and it needed to fight back.

Fadel Gheit: “In the heat of the battle they want to compete with two formidable opponents’ two companies Exxon/Mobil and BP. They were very anxious to book reserves because they are seeing their reserves declining faster than their competitors”

Shell’s chief economist at the time remembers the shift in mood.

Dr. Vincent Cable, Chief Economist, Shell, 1995-1997: “I think Shell in the mid 90’s had realised in had to change substantially because it was underperforming relative to its main rivals”

Rajan Datar: “Companies like Shell ultimately have to please their owners, the investors. They have got to prove that they have a future and the future lies in finding new supplies of oil. Basically you can’t run on empty. For Shell these were desperate times and desperate times require desperate measures.”

By 1997 Watts had risen to head of exploration and production at Shell. He was in charge of the scramble for new supplies of oil.

Fadel Gheit: “Phil Watts was very competitive man he is the he is very vocal he can be loud like you know… I have a task, I’m goanna get it and its goanna get done the way I want it”

And what he wanted above all was for his team to find more and more of those all important oil reserves… Phil for reaching for the stars.

Just after he started his new job determined to make his mark he addressed a Shell business convention in Maastricht in the Netherlands dressed as a spaceman.

The stunt was designed to inspire employees across the globe

Dr. Vincent Cable: “I think it’s the kind of thing you’d find in many big modern companies where the leader of the company has to communicate with you know a hundred thousand people different nationalities you’ve got to you know adopt a gimmick”

Sir Philip was promising a huge step for mankind for Shell anyway.

Supposedly Sir Phil’s voice: “I’ve seen the future and its great”

The moment was captured for posterity in this actual snap of the event

It was totally out of character for the normally un-showy Philip Watts but his audience lapped it up… boogieing to the beat of a popular Latin hit they wore T-shirts emblazoned with the slogan 15% growth

Jim Washer: “I don’t know quite how this fits in to targeting 15% growth and a bright future for the oil and gas business but em but the whole of the senior management team were on stage dancing the Macarena”

The stunt was in keeping with the new corporate climate

It was the late 90’s and brash American ideas for setting ever more challenging targets were all the rage

Dr. Vincent Cable: “The world was becoming more dominated by the American way of running companies a much more aggressively commercial approach was adopted”

But for some this was exactly when the company started to overreach itself

Jim Washer: “I think there was a feeling that when you have this growing culture of stretch targets this led to maybe overambitious business plans being presented.”

As 1997 drew to a close Shell found the ideal solution to their problem. The massive Gorgon gas field off the coast of Barrow Island in Australia. It seemed like a Godsend boosting Shell’s reserves by half a billion barrels.

Fadel Gheit: “Their inability to replace reserves made them obviously much more anxious to grab anything they can get their hands on so gorgon became one of the big prizes if you will that’s available for them”

And in Nigeria and the Middle East the company calculated that new methods could extract ever more oil from existing fields boosting reserves even more. Philip Watts was riding high

In 2001 his apparent success as head of exploration rocketed him to the top job

The boy from the Leicester semi was now on top of the world. Chairman of Royal Dutch Shell.

But the party mood in the corporate world was soon to fizzle out. Enron, one of the worlds largest companies imploded after falsely inflating profits. Investors lost billions. It should have served as a warning to Shell. The Securities and Exchange Commission towers watchfully of New York’s financial district regulating companies share trading in the US.

It was determined to prevent anymore catastrophes.

Lynn Turner used to be chief accountant at the SEC

Lynn Turner, Chief Accountant, 1998-2001, Securities & Exchange Commission: “As a result of Enron they looked at every major company in the United States that are listed here all the fortune 500 companies, that would have included Shell”

All oil companies who trade shares in the USA have to file reserves with the SEC… they have to meet common definitions of proven and probable supplies so that investors can then make an informed choice about where to invest their money.

Lynn Turner: “It’s my understanding that what happened was that the SEC had as part of their review process entered into a review of Shell’s filings”

It’s by no means an exact science but reserves are said to be proven if they can be extracted economically and sold at a profit and if there are doubts oil companies have to admit that and say their reserves are only probable

Lynn Turner: “If you make disclosures that are false and misleading especially if you knowingly do that then you have broken the law… that becomes a serious thing for which you can be prosecuted”

And there was one man at Shell who was becoming all to aware of that… at 6ft 7” Walter van de Vijver was an imposing figure. In 2001 he took over Philip Watts’s old job head of exploration and production. That should have made him a prime contender in the future for the top spot

Fadel Gheit: “He was very young he was very knowledgeable he was very smart very articulate but always… always came across as someone who is carrying a huge burden.”

And what a burden. Soon after he started the job Walter was shocked to discover that huge oil and gas finds booked by Philip Watts did not meet the SEC’s definition of proven reserves. That made Walter a very worried man. He’d been handed a poisoned chalice.

Fadel Gheit: “It’s a terrible feeling I tell you. Now looking back I said the man you can tell why he was not enjoying his you know his very promising career”

Walter decided to tackle his chairman over the falsely booked reserves. On February 11th 2002 he wrote to Philip Watts and the governing body called the committee of managing directors. He politely informed them the Shell group could be misleading investors

(Text appears on screen while actor recites in Dutch accent)

“Recently, the SEC issued clarifications that make it apparent that the group guidelines for booking proved reserves are no longer fully aligned with SEC rules”

In plain English, billions of barrels of oil that Shell was claiming it had in reserves failed to meet SEC rules because of what Walter called

(again text on screen while actor recites in Dutch accent)

“Potential environmental, political or commercial showstoppers”

Walter was privately fuming because the showstoppers, the factors making it hard to get reserves to market were being ignored. A vivid example was here at Gorgon in Australia. Remember how Shell had celebrated the booking of half a billion barrels of oil equivalent from the gas field? Well there was a problem that it conveniently overlooked. It was going to be very hard to exploit those reserves. Although there was a small exploration base there it would need to build a gigantic gas liqufication plant on Barrow Island, a class A protected nature reserve.

Local conservationists were kicking up a storm

Chris Tallentire, Director, Conservation Council of Western Australia: “Barrow Island really is the home to a very very special collection of animals. There are some 24 species that only exist on the island. Amongst them you’ve got animals such as the spectacled hair Wallaby and we’ve also got the magnificence perentie which is the second largest lizard in the world.”

The venture was a joint project between Shell Chevron/Texaco and Exxon/Mobil and Chris Tallentire recons it could become an environmental nightmare.

Chris Tallentire: “Its going to require a massive workforce, some 3,000 people would be on the island during the construction phase and its just going to be impossible to ensure that they understand the importance of protecting the environment”

The gas plant will be subject to environmental impact test before the Australian government approves it. And the government is under immense pressure to protect the areas unique wildlife

Chris Tallentire: “Conservationalists across Australian are going to being doing all we can to make sure that the proposal doesn’t go ahead. It would be quite wrong to a for any oil company to say that the gas reserves in the Gorgon gas field are bookable or in the pocket”

But despite these obvious obstacles that’s exactly what Shell did. Its partners, Exxon/Mobil and Chevron/Texaco had booked nothing. Shell had clearly breached SEC rules but for now it was kept secret from investors

Lynn Turner: “You had Shell saying they had booked oil and gas reserves that were fairly certain proven and they could commercially viably produce them whereas some of their competitors had not. That made them look better than the others.. certainly a thing that the SEC would look on and challenge and I think that is\why people have really questioned was Shell dealing with reality or did the reports reflect more a Grimms fairy tale”

And Walter felt Shell was breaking the rules in other places too… he pointed to over-bookings all over the world… in Norway and the Middle East and most of all in Nigeria. The potential showstoppers here included potential unrest and environmental damage

(video of MOSOP & Ogoni protests)

In total Walter warned that the chances of producing 2.3 billion barrels of oil could be wrecked although Shell had already filed them with the SEC as proven

Walters memo of 2002 posed a problem for Shells Committee of Managing Directors. Philip Watts and Walter himself sat on the Committee and so did a man called Jeroem van der Veer, head of chemicals. He was a rival to Walter for the top job. He and the others were told the problem was being addressed and they didn’t pursue it

Dr. Vincent Cable: “Senior Management were under very very strong pressure to produce better results particularly through the activities of exploration and production but more generally and I guess temptation prevailed over good sense and you know corners were cut in a way that was completely unacceptable”

But right now Shell was getting away with it and Philip Watts was determined to maintain the pretence

In a testy memo on May 28th 2002 he pulled rank demanding Van de Vijver played for time. It was vital he said not to de-book the exaggerated reserves until new reserves had been found to replace them.

Walter was told to consider (text on screen spoken in imitation of Watts accent)

“The whole spectrum of possibilities …leaving no stone unturned”

The last thing Philip Watts needed now with the company under such flak for under-performing was to come clean… Appearances had to be kept up at all costs. Walter was being told to cover it up

Fadel Gheit: “You were doctoring basically the books, you were inventing numbers and now the head of E & P was agonising over the embellishment of the reserve replacement figures. He’s been going through this experience of certifying the reserve which he knows doesn’t exist.”

Walter van de Vijver was living a nightmare

It was like Watts was in the driving seat with Walter sitting beside him urging him to take more caution. But Philip Watts was intent on slamming on the gas pedal and Walter was trapped. Unable to stop the boss steering the company to catastrophe.

Voice of Fadel Gheit: “He could not complain to his boss because his boss was giving him an instruction to do what he thought was wrong so there was no way for him to escape.”

Particularly galling was the fact that Walter believed that Philip Watts had caused the problem in the first place. Things started to get very bitter between the two men.

In September 2002, Watts and van de Vijver met over a meal to thrash out their differences. Shell had still failed to come clean. Van de Vijvers’ warnings were becoming ever louder and more explicit.

By now he had sent a second note telling Watts and the CMD that Shell was effectively fooling investors.

(Dutch accent voice over text on screen)

“The market can only be fooled if the credibility of the company is high”

But that credibility relied on the genuine replacement of reserves and on that score Van de Vijver warned

(Dutch accent voice over text on screen)

“We are struggling on all key criteria”

The two men could not settle their argument and Van de Vijver recorded his own feelings about Shell’s deception

(Dutch accent voice over text on screen)

“Bottom line was that both reserves replacement and production growth were inflated”

A little later in a third written note to Watts, van de Vijver could not disguise his contempt for the deceit

(Dutch accent voice over text on screen)

“I must admit that I become sick and tired arguing about facts”

And what of the Committee of Managing Directors? They too had received a much stronger warning about fooling the market. Jeroem van der Veer and the rest of the CMD still took no action.

Fadel Gheit: “Nobody can say I was not there… I did not attend this meeting… or I did not receive this memo that is not an excuse”

Ironically amidst all this controversy Philip Watts was invited to Buckingham Palace to collect a knighthood for services to British business

In March 2003 his idea of serving British business was to submit a dodgy report to the SEC which helped shore up Shell’s share price. In it he booked 19.3 billion barrels of oil reserves including the 2.3 billion he’d been warned not to include.

But it wasn’t only Philip Watts. Walters’s compatriot and rival Jeroem van der Veer was also in the frame. He too signed statements declaring that the submission known as a 20F was a true and faithful description of Shell’s reserves. It was an act that would later haunt both Watts and Van der Veer.

Lynn Turner: “If someone has signed that 20F and that individual when signing it knew it was wrong then that person will be culpable and people should not be surprised if the Justice Department here prosecutes them to the fullest extent possible.”

For a fourth time in august 2003 Walter yet again informed Sir Philip that reserves had been wrongly booked this time in his mid year business review

(Dutch accent voice over text on screen)

“We know we have been walking a fine line recently on external messages… promising that future reserves additions are expected in 2003…while we know there is some real uncertainty about this.”

By now Walter was in such a rage he was becoming known as the tall angry Dutchman. Proud and uncompromising Watts counter-attacked with a staff appraisal of walter that the tall and angry Dutch considered grossly unfair. He exploded. On November 9th he emailed his boss

(Dutch accent voice over text on screen)

“I am becoming sick and tired of lying about the extent of our reserves.”

Sir Philip was finding it harder to keep the lid on the scandal. The fourth booking at Gorgon was just too blatant and SEC investigators were being to trig something was a little bit dodgy.

Lynn Turner: “There were questions raised there might have been inconsistency with disclosures by other companies in the same oil and gas fields say in Exxon/Mobil and since you review all these companies you see what one another is doing at the SEC you compare them what ones disclosing to the other and if there are inconsistencies then its not unusual for the SEC will do a deep dive and look further”

SEC investigators were inching closer and closer to the truth

Until this point Walter could have portrayed himself as the Whistleblower demanding that Shell come clean. But then he made a curious and fatal mistake. On December the 2nd Walter received a report from a senior member of his team… it warned that if the 2003 SEC filing was wrong the company should immediately announce a downgrading in reserves or else break the law.

It was an echo of Walters own first warning made nearly two years before

But amazingly Walter emailed back

(Dutch accent voice over text on screen)

“This is absolute dynamite, not at all what I expected, and needs to be destroyed”

He deleted the correspondence from his computer

Fadel Gheit: “If anything that he did wrong was the cover-up more than anything else because he actually destroyed documents”

His actions were hard to explain because on December the 8th he also submitted a 42 page report to the Shell Committee. This reflected the findings of a comprehensive audit of the reserves which had just been completed

Walter warned that the reserves were even more overstated than previously thought this time by a massive 3.6 billion barrels

With the SEC on their tail as well they had no choice but to come clean

The scandal blew up and the company’s reputation carefully nurtured over a century was destroyed.

Fadel Gheit: “Most investors and analysts had almost blind faith in the company and its management. Unfortunately all this came to a screeching halt after the disclosure”

Shell at last revealed to the world that it had been exaggerating reserves by nearly 4 billion barrels. But even that wasn’t the whole truth. In three subsequent announcements Shell was forced to revise that figure to a staggering 4.5 barrels. To reach the true number Shell had to slash 23% off its stated reserves.

The news reached some very tough operators with a desire for retribution. Stanley Bernstein, a New York lawyer, has won millions in compensation for defrauded investors.

Stanley Bernstein, Lawyer: “Shell has lied intentionally and deceived the public about how much oil in had in the ground how how certain it was oil could be brought to market. Once the truth came out the stock price dropped precipitously to reflect the fact that the company was simply not as valuable as it was being portrayed to be was not as valuable as its competitors were.”

Bernstein’s leading what is known as a class action against Shell to recover money lost by investors. His main client is a US pension fund on which teachers, fireman and other valuable public service workers depend.

Stanley Bernstein: “Millions and millions of people had investments either directly in Shell or through their pension funds. They may not have known they were investors in Shell but now they know that Shell lied to them and cost them money. They overpaid for their Shell securities because the Shell executives misled them about the economic value of the Shell securities.”

And Stanley is not the only one on Shell’s case. The SEC has launched a formal inquiry and so too has the US Department of Justice.

Stanley Bernstein: “When you have a fraud perpetrated over a long period of time when you have a fraud perpetrated by the very heads of the company with specific responsibility for this core issue the regulators are going to get put their teeth into this and make sure that there is appropriate punishment for the individuals involved”

Back in London sir Philip Watts protested his innocence. At a presentation for investors at the thistle tower hotel in February he led them to believe that he had only recently found out there was a problem and that he had acted as soon as possible

(Reconstruction of segment of speech)

“the thing came up late last year as soon as that came to my attention it was a matter of all hands on deck and I remember writing down the words get the facts and do the right thing”

Struggling to survive Watts appeared on bbc news after the presentation to say he was going to tough it out…

(video clip Watts being interviewed BBC News, 5th February 2004)

“I’m not going to eh resign I’m determined to see this thing through its come up on my watch we going to put it right”

But shortly after the wall street journal stated leaking information about Walters warnings over the past two years

The story winged its way around the world

Sir Philips old friend was baffled and dismayed

Dr. Andrew Armour: “It’s very difficult to understand how the statements that were made by Sir Philip could have been made in the light of what we now subsequently know to have been a long discussion. It may apparently be difficult to therefore sustain the description that I have made of Sir Phil as an honest man but I would much prefer prefer to think of it in terms of some awful mistake”

In March just three weeks after declaring his intention to remain at the helm sir Philip resigned forced out by the other Shell directors his attempts to restore Shell to its former glory were well and truly sunk

Fadel Gheit: “He left as discredited broken man that just betrayed the trust of his shareholders and investors”

The prematurely retired sir Philip did enjoy some consolations

He retreated behind the impressive gates of his secluded mansion in Berkshire

He had more time to devote to his Japanese garden but more importantly perhaps more time too to spend a very generous £1 million pound payoff and an annual pension of over £580,000 paid for by the very people he had deceived, the shareholders

And the career of Walter van de Vijver once the heir apparent was also in ruins… he too was force to resign

Fadel Gheit: “If Phil Watts feels terrible Walter must be feeling a lot worse because Walter as a lot younger had tremendous future and career to look forward to.. he had another good 15 years to run Shell and probably he would have done a very good job”

So who could ascend to the top job at Shell?

Step forward Jeroem van der Veer: The very same man who with Watts signed the false SEC declaration in March 2003.

The lawyers are after him too

Stanley Bernstein: “He signed false financial statements… he signed certifications that the financial statements met with SEC guidelines… and I will venture to guess that when the truth comes out we will find out that he did virtually nothing if anything to confirm the veracity of those numbers”

Last month at Shell’s annual general meeting held in London’s Docklands there was outrage

Shell Shareholder: the ousted executive directors have been remunerated for failure and misconduct

2nd shareholder: This whole board should be sacked

3rd shareholder: I think it’s outrageous that’s about the politest thing I can say on prime time TV

We wanted to ask some pertinent questions to the top Shell suits who had so angered their shareholders

Jeroem van der Veers position is under intense scrutiny…

He refused to take part in our programme

Instead Shell issued a statement insisting…

“That in spite of the warnings van der Veer didn’t know the booking statements failed to comply with sec rules until he received full audit statements completed in late 2003”

That’s only just before Shell broke the news to the world

Shell also said they were committed to taking action to ensure over-booking of reserves never happens again

We also asked Sir Philip for an interview but he refused so we paid him a little visit

He lives just outside the pretty village of Binfield where we caught up with him

BBC Reporter, Rajan Datur asks: “Sir Philip”

“Sir Philip”: “Can you tell us why you did not heed the warnings from your colleagues about the true state of Shell’s oil reserves please?”

(Sir Philip drives off in his Jaguar without saying a word)

Rajan Datur to camera: “Well that’s a pity he obviously didn’t want to talk to us but I presume class action lawyers, financial authorities and investors will want some answers out of him”

Later sir Philip issued a statement to us saying he could not comment while official investigations were underway

He said:

(actors voice over text shown on screen)

“I remain confident that I acted appropriately and the ongoing investigations will arrive at the same conclusion”

But that’s not good enough for lawyers like Stanley Bernstein. He’s going after Watts and van der Veer and thinks they should pay up out of their own pockets

Stanley Bernstein: “There is going to be huge monetary recovery from all those parties and that will include we believe the individuals and if they’ve benefited from this fraud and if they’ve participated in the fraud they goanna have to pay for the fraud”

Worse still for the likes of Watts the threat of jail looms large and with no Japanese plants for company.

Lynn Turner: “If the US Justice Department determines that the top executives at Shell signed the certification that these financial statements and disclosures were accurate when in fact they knew they weren’t that’s fraud in the United States and the Justice Department will have a basis for criminally prosecuting the executives and if they deem necessary sending them to jail”

(video of Sir Philips garden seen through iron bar fencing)

Sir Philip will no doubt be hoping theses are the only bars he will be living behind…

Whatever his fate, he and some of his colleagues have guaranteed the world will never again be so sure of Shell

Reporter: Rajan Datur

Research: John Kitsis

Assistant Producer: Georgina Davies

Producer/Director: Terry Messenger

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