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Deception, downright lies and broken promises by Shell

The promotion that was the subject of our 2nd High Court Action against Shell

Extracts from the ebook “John Donovan, Shell’s Nightmare” (now available on Amazon websites globally)

Shell kept silent about Hakluyt, even during a meeting with Mr. Rines on 10 September 1998 at Shell-Mex House attended by Mr. Wiseman, Mr. Joseph of DJ Freeman and a representative from Shell’s media department. Some judgment can be made on how sensitive the subject was by the fact that both sides tape-recorded the entire interview.

Extracted from pages 110 to 117 inclusive.

AN INVESTIGATION IN 1997 BY SIMON RINES FOR THE GUARDIAN NEWSPAPER

I am able to provide an overview from an independent journalist on how matters looked in April 1997. It is in the form of a 14-page draft Guardian/Observer Newspaper article authored by Simon Rines, as faxed to John Donovan on 11 April 1997. Mr. Rines wrote for many marketing magazines as well as for The Telegraph, The Observer, and The Sunday Business.

No article was published at the time. Simon Rines was however the joint author with Sylvia Pfeifer of an article published by The Sunday Business newspaper on 6 June 1999: “Donovan takes Smart case against Shell to court.” That article can be seen on the last page of this chapter.

Neither Mr. Rines or The Guardian Media Group have been notified about the publication of his draft article for The Guardian, which means that it is not published with their advance knowledge or with their prior consent.

The draft was circulated to me and the aforementioned Mr. Paul Brown, a correspondent for The Guardian who now teaches journalism.

I have inserted the initials AJL instead of the name of the then National Promotions Manager at Shell U.K. Limited.

As can be seen in his draft article, Mr. Rines did investigative the anonymous call and with the aid of British Telecoms special investigations unit found the phone box in London from where the call was made.

Events turned even more sinister soon after the date of the draft article, with the series of burglaries.

In a subsequent faxed communication, on 14 May 1997, Mr. Rines expressed concern about possible additional espionage activity being directed at us. He suggested that certain security measures should be implemented.

Neither he, nor I, had a clue at that time about the clandestine activities of Hakluyt & Company. We had never heard of the spy-firm.

Shell kept silent about Hakluyt, even during a meeting with Mr. Rines on 10 September 1998 at Shell-Mex House attended by Mr. Wiseman, Mr. Joseph of DJ Freeman and a representative from Shell’s media department. Some judgment can be made on how sensitive the subject was by the fact that both sides tape-recorded the entire interview.

Shell did not reveal the Hakluyt connection. A letter my father sent to Colin Joseph on 23 November 1998 makes reference to the meeting and what was discussed.

The bold highlighting is by me.

THE DRAFT ARTICLE BY SIMON RINES

Since August 1 Mark Moody-Stuart has been getting used to his new position as head of Royal Dutch Shell, Europe’s largest company and, although trading conditions are somewhat bumpy, the company itself is enjoying a stable period. A huge effort to re-establish its ethical credentials following the public relations fiascos over Brent Spar and its involvement in Nigeria has largely paid off. There would seem little need to spare a few drops of oil for troubled waters. But if the whole question of ethical conduct blows up in his face, Moody-Stuart cannot claim he wasn’t warned.

The source of ignition is not an environmental pressure Group or questionable involvement with a political regime, but Suffolk businessman John Donovan and his 81 year old father, Alfred. The case involves a litany of deceptive behaviour, downright lies, broken promises and incompetence on behalf of Shell. It has already paid out over a £X million pounds in damages and £X in costs to Donovan.

It has resulted in one in ten Shell UK forecourt traders joining an anti-Shell pressure group, disruption at two of Shell UK’s AGM’s and Moody-Stuart has had to stand by and watch as Donovan has placed highly embarrassing advertisements in the trade press and set-up an equally damning website.

In the latest round of battle, the stakes are higher than ever prompting Shell’s solicitors to send a clandestine investigator to Donovan’s business premises. Most alarming, however, is an anonymous phone call Donovan received warning him to lay off Shell or the consequences to him and his family would be dangerous.

The story begins in 1983 when John Donovan, managing director of Don Marketing, persuaded Shell that he had devised a legal version of the forecourt promotion Make Money that Shell had originally run in the 60’s but withdrawn on police advice that it contravened the lotteries act. Shell agreed with Donovan and ran Make Money, the basis of which was to collect two halves of a specified denomination note to claim a reward of that value. In marketing terms, it was a sensation. Forecourt sales rose by 30%, people were placing ads in newspapers to get the missing halves and Don Marketing won an Institute of Sales Promotion award for the campaign.

There then followed a long and successful relationship between the two companies until 1992 when Shell appointed AJL as national promotions manager.

Initially Donovan saw no problem in working with AJL and briefed him on a raft of new marketing ideas over an eight-month period. The briefings were ‘in confidence’, a clause which effectively ensured that Donovan retained the legal rights to the ideas.

“I first became aware that things were amiss one morning in June 1993 when I opened my newspaper to see an advertisement for Shell’s Nintendo promotion” says Donovan.

“I had briefed AJL on the idea in 1992 and had done quite a lot of work on developing it. AJL had told me in February that Shell had, at the time, no plans to run it but he would keep me informed. I later discovered this to be deceptive because developments on Nintendo had already taken place.”

Donovan immediately went out and collected some of the ‘instant win-scratch off game pieces’ and discovered that although the design differed from his proposals, the concept was almost identical. Donovan also noticed that many of the latex scratch off coverings were too thin,  making it possible to read through the material. When later challenged on this point, AJL said that he didn’t care because the top prize was worth only about £70.

In other words, staff at filling stations were able (using friends or family) to claim many of the prizes and Shell’s national promotions manager was unconcerned.

Donovan phoned AJL pointing out that Nintendo was his idea and pressed for a settlement without resorting to the costly and, for Shell, embarrassing recourse to legal action. A discussion also took place on the subject of re-running Make Money in which Donovan pointed out that the two companies had equal rights. In response to this point AJL said: “I don’t  care about that. If we want to run Make Money again, then we know how to do it”.

In July 1993, Donovan wrote to the managing director of Shell UK, David Varney (now chief executive of Transco) to complain about AJL’s behaviour and to seek an internal investigation into the matter. Varney’s reply stated that he had personally undertaken an investigation and that AJL had no involvement in the Nintendo promotion, implying that he could not have stolen the idea. The whole letter was a pack of lies. It later emerged that marketing and communications manager David Watson had undertaken the investigation, that AJL had a major role in Nintendo, and that the letter far from being written by Varney, was actually drafted by Watson and AJL – Varney had merely signed it.

The matter dragged on until February 1994 when in, a further telephone conversation with AJL, Donovan became suspicious of evasive answers on the subject of re-running Make Money. When challenged directly on the matter AJL again responded evasively: “If we want to do something in a year’s time then we’d have to get it resolved at that stage”. Using contacts in the industry Donovan discovered that Make Money was in production and challenged Shell’s legal department who denied the allegation. Don Marketing saw no option but to issue a High Court writ.

Within 12 days Shell was ready to settle but offered a ten minute ultimatum to Donovan – either accept a £60K settlement or the company would scrap Make Money and run another promotion that was also at an advanced stage of preparation, in which case Don Marketing would get nothing. Donovan agreed, but later discovered that the alternative promotion was ‘Now Showing’, based on another of his ideas. Had he known this he would not have settled for what he considered an inappropriate sum. When Shell did run Make Money in April 1994 it was, again, a flawed promotion because it was possible to see through the envelopes leading to the same potential abuses as with Nintendo.

Donovan used this information to his benefit. In exchange for his silence on the matter, Shell agreed to mediation on the Nintendo dispute. Donovan suggested that, a high ranking member of Royal Dutch, John Smeddle, whom he trusted, be arbitrator.

But when mediation began Shell UK had broken the agreement because there was no one present who had the authority to compromise the action. Everyone’s time, including Smeddle’s, for whom Donovan still has high regard, was wasted.

“After that failed mediation Shell’s solicitors sent me two letters suggesting a settlement offer, which would suit both sides  was imminent.” says Donovan. “This was followed by a letter nearly three weeks later stating that no offer was to be made. I feel we were hoodwinked to keep quiet during the Make Money promotion.”

In the meantime Shell had launched Now Showing. Donovan issued High Court writs covering both Nintendo and Now Showing and a lengthy legal dispute entailed. In this time he became a Shell shareholder and, with his father, set up the Shell Corporate Conscience Pressure Group which, at one point, had over 10% of forecourt owners as well as Shell shareholders as members.

Apart from Donovan’s dispute with Shell the group also aimed to highlight concerns being expressed by franchisee’s in their dealings with the company. The group conducted surveys of the franchisees in which 89% of those responding said that they would not recommend any petrol retailer to switch to Shell and 91% said that Shell’s management should resign. The results were published in a full-page advertisement in trade publication Forecourt News in May 1995.

“I felt that Shell was using its strongest weapon, the ability to make litigation expensive and lengthy, to the full.” Says Donovan.

“I didn’t want a long drawn out case and thought that if I use my creative skills to put pressure on them then the matter would be concluded more quickly.”

Shell eventually settled out of court in October 1996 paying Don Marketing £200,000 in respect of Nintendo and Now Showing and £74,500 to cover legal fees. The Shell Corporate Conscience Pressure Group ceased operations. Donovan also received an unsolicited letter of apology from chairman and chief executive of Shell UK, Dr Christopher Fay stating that “some of our dealings with you appear not to have met the high standards we set ourselves.”

In the meantime Shell had launched a new card based loyalty programme, Shell Smart in October 1994. In March 1997, however, a new, multi-partner version of the scheme was launched in Scotland. “1 immediately recognised it as almost identical to the plans I had first put to Shell in 1989.” Says Donovan.

Donovan wrote to Dr Fay who refused to enter into correspondence and put the matter in the hands of Shell’s solicitors.

Donovan put proposals for binding arbitration to Moody-Stuart (then, as now, Chairman and MD of Shell Transport) which were rejected. He then spent a year gathering evidence and corresponding with Shell. He finally issued a writ in April this year alleging breach of contract and misuse of confidential information over the Smart scheme. If Donovan succeed’s he stands to make millions because, unlike the previous claims, for short- term ‘tactical’ promotions, Smart has an unlimited life span and is now running in nine countries. If Smart is introduced to the US market where, in a similar case against General Motors, the litigant was recently awarded $24 million in damages, any settlement in Donovan’s favour could be astronomical.

Shell’s response to the writ was to issue a press statement claiming that Donovan “has made various claims that he or his company own rights in respect of several Shell forecourt promotions” and that “Shell UK is satisfied that it (the Smart claim) is entirely without substance.”

Donovan issued a writ for libel on the grounds that the statement implies that his previous claims were without merit and that the Smart claim is bogus. Shell sought to have the libel writ struck off, but in a preliminary hearing in July, this was rejected and Shell was ordered to pay costs.

To keep the pressure on Shell, Donovan set up a website in April that pulls no punches. He has also published leaflets and his father had a slanging match with Moody-Stuart at Shell’s recent 100th anniversary AGM.

More recently Donovan placed an advertisement in Forecourt Trader warning Shell retailers that they too could face prosecution if they run Smart. Further advertisements have been placed in the marketing trade press warning existing and potential partners of Smart that they could face legal action.

The past few months have also seen a series of strange approaches to the Donovan camp. In May, a Paris based journalist, Charles Hoots, contacted Donovan claiming to be from The European and wanted to discuss the case. He then travelled to Suffolk from Paris, and questioned Donovan and a colleague over several hours including a lunch costing £90 that he insisted on paying for. In all he had spent several hundred pounds and had put a lot of effort into the story but, although he had freelanced for The European two years ago, he had no current commission nor has he ever contacted the paper on the matter.

Similarly a ‘Daniel Wilson’ phoned Donovan’s solicitor claiming to be from The Express’ and wanted to discuss the website. He left a number that proved to be a dead line. No one at the Daily Express has any knowledge of him and he has never called back.

Then on Sunday June 14 Donovan received an anonymous call at home. According to Donovan the caller had an in-depth knowledge of the case including such details as Dr Fay’s anger following the incident at the recent AGM.

Most of the discussion concerned information that is, theoretically, in the public domain although it would have required considerable research for anyone involved to discover. The caller then said that Shell had instructed an investigative resource and that the company was about to go on the offensive. He then mentioned that Donovan should not count on former Shell employees to give evidence and that Shell’s patience with Donovan had run out. He told Donovan that for the sake of him and his family, he would be well advised to withdraw the claims otherwise Donovan would be putting himself and his family in a dangerous situation – he then hung up. The Guardian has since traced the call to a public telephone box on London’s Whitechapel Road just outside the City.

The following day Donovan reported the matter to the police and faxed Shell full details of the call and the activities of Hoots, Wilson and ‘Christopher Phillips’.

Donovan had learned that morning of a visit by Phillips on May 21 to a business centre used occasionally by Don Marketing as a messaging address and meeting facility. Office administrator, Marie Neal, had first noticed Phillips scrutinising the pigeon holes used for mail when she entered the otherwise empty reception area.

When approached, he explained that he was looking for office accommodation for a friend who worked in marketing and was interested to know if there were similar companies in the building. When Don Marketing (being a non-residential client) was not mentioned, he broached the subject of such users. Neal told him of Don Marketing but despite his questioning on its activities, she couldn’t give more details – partly through lack of knowledge and partly through suspicion. ‘Phillips’ gave her a card listing him as a director of Cofton Consultants based in Brompton Road, Knightsbridge. Cofton Consultants is not listed in Companies House, the address is for a secretarial service which Phillips uses as an accommodation address – staff there have no details of a forwarding address or number.

Neal had not immediately informed Donovan because she didn’t consider Phillips’ visit significant.

Shell’s solicitors, DJ Freeman responded to Donovan’s fax with a promise to cooperate fully with any police investigation but categorically denied any knowledge of Hoots, or the anonymous caller, although Shell is understood to have launched an internal inquiry into the call. Despite the fact that Donovan’s fax had reported the visit of Phillips and the caller’s reference to an investigative resource, DJ Freeman made no mention of Phillips’ activities.

It was only when challenged directly about Phillips later in the week that DJ Freeman admitted his involvement, explaining it ‘was, quite reasonable to establish whether my clients would be covered to receive all their costs from you if they are successful in this action’.

Quite how a credit check on Donovan could be made by  asking questions unrelated to his financial situation is unclear. The reason given for Phillips’ visit is also undermined by the fact that it is John Donovan, not Don Marketing, who served the writ – Don Marketing’s credit rating is, therefore, irrelevant.

Significantly, another aspect of the anonymous call turned out to be accurate in that Shell has subsequently gone on the offensive by issuing a counter claim against Donovan claiming £100,000 for his failure to comply with the terms of the Nintendo/Now Showing settlement.

Again the legal process is grinding on with any outcome on the libel and Smart claims unlikely before next year. Donovan believes the whole unpleasant situation could have been avoided:

“I don’t seek to hold Shell to ransom for an enormous amount of money and I certainly don’t relish a long legal battle. I have an 81 year old father with a War Disability Pension and a mother, who is also unwell, to look after. I’ve made numerous offers of binding arbitration to Shell but they have refused.

But I won’t just drop the case,its not about money – it’s because I don’ t think that big powerful corporations should be allowed to treat people the way I have been treated.”

Anyone who has met Donovan can see that he is neither paranoid nor obsessive. He is, however, determined and meticulous to the degree of keeping every piece of correspondence (including the envelopes they were posted in) relating to Shell since before the legal wrangles began.

Every letter that he or his solicitor has sent in recent years has been copied to senior members of Shell’s management including Moody-Stuart.

Despite the enormous number of public accusations that he has made, and the damage that they have caused Shell, the company has so far refrained from issuing a single libel action.

Shell’s statement of General Business Principles contains a section on ‘Business Integrity’ which states: ‘Shell companies insist on honesty, integrity and fairness in all aspects of their business’. Considering full details of the case are known to Shell’s senior management, and with AJL still employed by the company, Donovan, for one, finds his experiences hard to square with those lofty ideals.

ENDS

Extracts End

BACKGROUND INFORMATION ABOUT SHELL’S EPIC 25 YEAR FEUD WITH JOHN DONOVAN – which puts the extracts in overall context.) They should be read in the context of the fact that we were besieged by undercover activity during the run-up to the SMART High Court Trial – the climax of our litigation alleging that Shell had stolen Intellectual Property from our company Don Marketing. Shell brought a Counterclaim amid a barrage of aggressive threats and sinister activity directed against us. Shell did not disclose its close connection with a private spy firm Hakluyt & Company populated by former senior MI6 officers (such as Ian Forbes McCredie and other retired or freelance spooks). As Shell CEO Ben van Beurden mentioned in an illuminating wire-tapped telephone conversation with then CFO Simon Henry, Shell hired such MI6 people including Guy Colegate and John Copleston to negotiate with Dan Etete in the corrupt OPL 245 Nigerian oil deal. Both “people” are now defendants in a criminal action brought in Italy.

EARLIER EXTRACTS FROM THE EBOOK

John Donovan, Shell’s nightmare: Genesis

John Donovan, Shell’s nightmare: Süddeutsche Zeitung article

GERMAN TV: John Donovan’s revelations cost Shell billions

ARGUS FSU ENERGY INTERVIEW WITH KREMLIN ATTACK DOG, OLEG MITVOL

How Shell lost its majority stake in Sakhalin II

John Donovan, Group Chairman, Royal Dutch Shell PLC companies

Donovan family relationship with Shell

Long association with the Royal Dutch Shell

Since the 1990s, Shell has been at war with John Donovan

An unscrupulous Shell executive

SHELL PROJECT HERCULES RIGGED TENDER PROCESS

Secret Shell Writ Losses

Shell caught red-handed in Make Money deception

Donovan Defamation Actions Against Shell

Shell in legal row over Smart Card

Defamatory Posters on Display at Shell HQ

SHELL DEFAMATION PROCEEDINGS AGAINST SHELL WHISTLEBLOWER DR JOHN HUONG 

399 Former Shell Malaysia Employees Sued Shell for Misappropriation of Retirement Funds

Don Marketing posts legal warning about Shell

Bombarded by threats from Shell

SHELL TEXACO MERGER HITCH?

A BLUNT INSIDER JUDGEMENT OF ROYAL DUTCH SHELL

Shell corporate espionage

Shell Secret Manoeuvres in the Dark

Besieged by undercover activity during run-up to Shell SMART High Court Trial

Sir Mark Moody-Stuart and his family personally involved in Donovan litigation

Shell’s use of undercover agents

Shell Cloak and Dagger activities

HAKLUYT & COMPANY SPYING FOR SHELL

Shell’s retired spy chief Ian Forbes McCredie CMG OBE

Shell spying and surveillance operations

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnews.net and cybergriping.com are all owned by John Donovan

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