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Ex-Shell Chairman Challenges Watchdog over Oil Reserves Scandal

The Scotsman: Ex-Shell Chairman Challenges Watchdog over Oil Reserves Scandal

“The FSA found Shell guilty of market abuse and the Anglo-Dutch company last month agreed to pay £17 million to the FSA. (ShellNews.net)

By Phil Waller, City Staff, PA News

Posted 17 Sept 04

The former chairman of oil group Royal Dutch/Shell today challenged the City watchdog over its findings on the company’s oil reserves scandal.

In a letter to the Financial Services and Markets Tribunal, Sir Philip Watts sought permission to challenge some of the Financial Services Authority’s (FSA) findings on the reserves overstatement, which has led to Shell downgrading its proven reserves by 23%, or 4.47 billion barrels, since January.

The FSA found Shell guilty of market abuse and the Anglo-Dutch company last month agreed to pay £17 million to the FSA. read more

Shell’s Ousted Ex-Boss Breaks Cover, Slams FSA

THE WALL STREET JOURNAL: Shell’s Ousted Ex-Boss Breaks Cover, Slams FSA

“Both of Shell ‘s parent companies – Royal Dutch Petroleum Co., of The Hague, and London-based Shell Transport & Trading Co. – as well as Watts, Van de Vijver and other individuals face purported class action law suits in the U.S. from aggrieved shareholders. Watts and other involved individuals still also face probes from the SEC and the U.S. Justice Department.” (ShellNews.net)

By MARK LONG

September 17, 2004

Of DOW JONES NEWSWIRES

LONDON — Philip Watts, the ousted former chairman of Royal Dutch/Shell Group (RD, SC), broke cover Thursday, accusing the U.K.’s financial regulator of violating his rights and running a flawed investigation into Shell ‘s downgrade of its oil reserves.

“I believe that a full and fair examination of all the facts will demonstrate that I have acted properly and in good faith at all times,” Watts said in a cover letter to a filing requesting that the U.K.’s financial regulator’s appeals board give him a chance to clear his name. read more

Vision needed to revitalise Shell

London Evening Standard: Vision needed to revitalise Shell

“It is just six months since possibly the biggest post-Enron scandal erupted at Shell with the stunning admission that a group regarded as one of the most reliable in the world had lied about the health of its business.”

Steve Hawkes,

17 September 2004

SHELL chairman Jeroen van der Veer needs to give the presentation of his life next week, when he steps into the heart of the City to convince sceptics the struggling oil giant is on the way back.

After the worst year in the group’s long, proud history, van der Veer will finally spell out his vision for improving Shell’s reputation, restoring growth and, most importantly, finding more oil.

The setting is suitably ironic. Plaisterers’ Hall, one of the largest livery halls in London, is touted as reflecting the ‘grandeur of a bygone era’. Van der Veer now sorely needs to haul Shell into modern times. Deutsche Bank’s respected oil analyst JJ Traynor says: ‘The seeds of recovery are there … the right presentation could provide the catalyst.’ read more

Former Shell Chairman Appeals Censure

Forbes.com: Former Shell Chairman Appeals Censure

“The Financial Services Authority’s final notice, issued on Aug. 24, said Shell had made false or misleading announcements in relation to its hydrocarbon reserves and reserves replacement ratios between 1998 and 2003, and had made those announcements despite indications and warnings that they were false.”

Associated Press

09.16.2004

The former chairman of Royal Dutch/Shell Group, Sir Philip Watts, petitioned a British regulatory body for permission to challenge some of its findings on Shell’s oil reserves scandal.

In a letter submitted to the Financial Services and Markets Tribunal, Watts defended his actions as head of the company.

“I believe that a full and fair examination of all the facts will demonstrate that I have acted properly and in good faith at all times,” Watts said in the letter. read more

The Guardian: Shell’s pounds 17m will be used to reduce fees levied by regulator

The Guardian: Shell’s pounds 17m will be used to reduce fees levied by regulator

“The reduction is almost entirely due to the penalty paid by Shell for “unprecedented misconduct” in misleading the markets over the reporting of its oil and gas reserves.”

JILL TREANOR

Sep 14, 2004

All companies regulated by the Financial Services Authority can expect a cut in their regulatory fees next year following the record pounds 17m fine levied on oil company Shell.

For the first time since it was formed, the City regulator plans to reduce by just under 10% the charge it levies on firms and individuals it regulates.

The reduction is almost entirely due to the penalty paid by Shell for “unprecedented misconduct” in misleading the markets over the reporting of its oil and gas reserves. read more

FSA chief hits right note on investor responsibility

The Scotsman: FSA chief hits right note on investor responsibility

“In the wake of a splurge of recent fines, particularly the record £17 million penalty on Shell for the oil giant’s reserves shortfall and cover-up, there have been those who have argued that it is the culpable directors who should bear the penalty, not the companies and investors.”

SCRUTINEER

MARTIN FLANAGAN

CITY EDITOR

Posted 11 Sep 2004

THE comments of the head of Britain’s financial regulator about who should suffer from financial penalties for corporate wrong-doing – companies and shareholders or the errant directors themselves – is timely.

In the wake of a splurge of recent fines, particularly the record £17 million penalty on Shell for the oil giant’s reserves shortfall and cover-up, there have been those who have argued that it is the culpable directors who should bear the penalty, not the companies and investors. read more

Shell Reserves Scandal: Retired Shell engineer played central role

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE

Financial Times: Retired Shell engineer played central role

“the company had been engaged in accounting manoeuvres since 1997-98, including a flawed internal audit function”;  “Shell had engaged as [group reserves auditor] a retired Shell petroleum engineer – who worked only part time and was provided with limited resources and no staff – to audit its vast worldwide operations.”

By Adrian Michaels in New York and Carola Hoyos and Andrew Parker in London

Posted 30 August 2004

US and UK regulators on Tuesday went several steps further than Royal Dutch/Shell in their dissection of what went wrong.

The Anglo-Dutch oil group had already presented the main findings of an internal investigation in April into its reserves debacle.

That report heavily criticised dismissed senior executives – Walter van de Vijver, the former head of exploration, and Sir Philip Watts, former chairman. But it had less to say on how the company had been engaged in accounting manoeuvres since 1997-98, including a flawed internal audit function. The US’s Securities and Exchange Commission and the UK’s Financial Services Authority delve into the origin of the problems. “ read more

Shell boss pours oil on troubled water

The Times: Shell boss pours oil on troubled water

“the scathing reports, in which the FSA accused Shell of announcing false oil-reserve figures since as far back as 1998 again drove investors to rage that not enough was being done to restore credibility.”

August 29, 2004

Posted 30 August 04

In an exclusive interview, Jeroen van der Veer spells out his plans to appease investors and analysts to Lucinda Kemeny

AFTER 33 years at Royal Dutch/Shell, Jeroen van der Veer, chairman of the oil giant’s committee of managing directors, probably would not have chosen to mark his ascension to the top by signing off £82m in fines to two of the biggest financial regulators.

Last week’s settlement with Britain’s Financial Services Authority and America’s Security and Exchange Commission over charges that Shell misled the market about the true position of its oil reserves may have at least closed one chapter in the crisis that has enveloped the company. read more

The Scotsman: Concerns over potential £3m windfall

The Scotsman: Concerns over potential £3m windfall

“Ensuing investigations by the US Securities and Exchanges Commission and the UK Financial Services Authority revealed that the oil major had been over-inflating its reserves since 1998, implicating the company’s top management in the scandal.”

CATRINA STEWART

Posted 29 August 2004

A CORPORATE governance watchdog has flagged concerns over share option rewards for disgraced Royal Dutch/Shell executives Sir Philip Watts and Walter van de Vijver.

Sir Philip and Van de Vijver, who resigned this year along with chief financial officer Judy Boynton over the reserves scandal at Shell, could reap windfalls of over £3 million apiece if the dual-listed company’s share price achieves certain levels, said the Pensions Investment Research Consultancy (Pirc) this week. read more

Daily Express: FAT CATS REWARD: SIR PHILIP Watts

Daily Express: FAT CATS REWARD: SIR PHILIP Watts

His deputy, Dutchman Walter van der Vijver, repeatedly warned him of the overstatement and finally exploded in an angry e-mail last November that he was “sick and tired of lying about the extent of our reserves”.

Published 28 August 2004

Company: Shell

Payoff: £1m

Anglo-Dutch oil giant Shell shocked stock markets in January by admitting that it had overstated its proven gas and oil reserves by more than 20 per cent, the equivalent of a mind-boggling 4.47 billion barrels. Shell, long considered a safe haven by private investors and pension funds, saw £3bn wiped off its share value in the subsequent furore. Almost everybody with a pension will have been hit by the fallout.

Chairman Watts initially claimed he first heard about the shortfall at the end of 2003 but it was later reported that he was warned about the dangers in February 2002. His deputy, Dutchman Walter van der Vijver, repeatedly warned him of the overstatement and finally exploded in an angry e-mail last November that he was “sick and tired of lying about the extent of our reserves”. read more

Sunday Telegraph: Shell in Hell

Sunday Telegraph: Shell in Hell

29 August 2004

The oil giant has been heavily fined for overstating its reserves, but now looms the prospect of law suits against the individuals involved. Sylvia Pfeifer reports

The great and the good of the North Sea oil industry descended on the town of Stavanger in Norway last week for one of the sector’s annual get-togethers. But among the chief executives, politicians and royalty attending – Norway’s King Harald V opened the conference – there was only one man everyone wanted to see: Jeroen van der Veer. read more

Daily Mail: Alarm at former Shell chiefs’ options

Daily Mail: Alarm at former Shell chiefs’ options

“Pirc says Watts could make £3.1m if the shares reach 552p”: “Regulators are still investigating those believed to have had a role in the company’s reserves scandal.”

27 August 2004

Posted 28 August 04

OVERNANCE watchdog Pirc has given Shell investors something else to worry about after warning that ousted bosses Sir Philip Watts and Walter van de Vijver could collect hefty option gains on top of their massive pay-offs.

Pirc says Watts could make £3.1m if the shares reach 552p – below their 637p peak in 2001. Any option gains for Watts would be on top of his £1.05m pay-off and £584,000 pension. Shell shares rose 3 1/4p to 399 3/4p.

Van de Vijver needs a 70% share rise to put all his options in the money. Pirc says they would then be worth £3.6m, on top of his £2.57m pay-off and £260,000 pension. read more

The landslide bringing down Shell grandees

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE

The Daily Telegraph: The landslide bringing down Shell grandees

The SEC and FSA reports, however, go back to the previous regime, when Sir Mark Moody-Stuart was chairman.”: Even Shell fell for the “group bonding” mumbo-jumbo, and he was videoed stumbling blindfold around head office during one such session, talking of his desire to “encourage the creativity of people” around him. He seems to have succeeded.”

(Filed: 28/08/2004)

The Securities & Exchange Commission has announced its intention to pin the reserves scandal on individuals, writes James Moore

The Shell Show, a tragicomedy in an unlimited number of parts, featured a powerful double act this week.

On Tuesday America’s Securities and Exchange Commission and the Financial Services Authority both gave the company a good kicking for wrongly booking billions of barrels of oil and gas reserves as “proven”.

Now Harold Degenhardt, the director of the Securities & Exchange Commission’s office in Fort Worth, Texas, is hard at work on the sequel. “What people need to focus on is that companies only act through people,” he says. read more

Regulators dig deeper into Royal Dutch/Shell’s problems

Financial Times: Regulators dig deeper into Royal Dutch/Shell’s problems

“The SEC is scathing about Shell’s advice to investors that it had changed its mathematics, saying in its 1998 annual report only that estimation methods “have been refined”.

By Carola Hoyos, Adrian Michaels and Andrew Parker

Published: August 25 2004 03:00

Posted 26 August 04

US and UK regulators yesterday went several steps further than Royal Dutch/ Shell in their dissection of what went wrong at the oil group.

The Anglo-Dutch group had already presented in April the main findings of an internal investigation into its reserves debacle.

That report had been heavy on its criticism of dismissed senior executives – Walter van de Vijver, the former head of exploration, and Sir Philip Watts, former chairman. But it had been less fulsome on the detail of how the company had been engaged in accounting manoeuvres since 1997-98, including the administering of an internal audit function that was riddled with flaws. read more

Investigators say Royal Dutch-Shell officials in sights

Houston Chronicle: Probe aims at top: Investigators say Royal Dutch-Shell officials in sights

By TOM FOWLER

Posted 25 August 2004

U.S. and British securities regulators are focusing on senior Royal Dutch-Shell officials and the roles they may have played in the oil giant’s massive overstatement of reserves.

The Securities and Exchange Commission and England’s Financial Services Authority said Tuesday they are now pursuing senior officials from the company related to the matter, which led to numerous shareholder lawsuits and a Justice Department investigation.

“As our investigation continues, we intend to focus on, among other things, the people responsible for Shell’s failures,” said Harold Degenhardt, administrator of the SEC’s Fort Worth office. read more

SEC Order Shows Many Involved In Shell Reserves Debacle

THE WALL STREET JOURNAL: SEC Order Shows Many Involved In Shell Reserves Debacle

“administrative order confirms that the scandal touched many officials beyond the senior executives who have left the company”

By JOHN M. BIERS

August 24, 2004 6:25 p.m.

Of DOW JONES NEWSWIRES

HOUSTON — After months of quietly investigating the Royal Dutch/Shell (RD,SC) accounting scandal, U.S. regulators finally weighed in Tuesday, concluding in an official report that the company “knowingly or recklessly” misrepresented its oil and gas holdings.

The government disclosed no new bombshells, but a Securities and Exchange Commission administrative order confirms that the scandal touched many officials beyond the senior executives who have left the company. Shell neither confirmed nor denied the findings in a 19-page SEC order released in tandem with $125 million settlement. read more

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