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Watchdog’s bark far worse than its bite

From our November 2005 Shell News Archive

The Times: Watchdog’s bark far worse than its bite

“In the Shell case, the FSA had plenty of evidence of a conspiracy at the highest level against the interests of shareholders. The company’s own investigation unearthed compelling e-mail evidence, not least former exploration director Walter van de Vijver’s infamous complaint that he was “becoming sick and tired about lying about the extent of our reserves issues”.: “…it looks downright embarrassing that the FSA official who fought Sir Philip, former acting enforcement head David Mayhew, will later this month wave goodbye to the FSA and walk straight into a highly paid job at Herbert Smith — the firm advising Sir Philip.”

Posted Friday 11 Nov 2005

SHELL, we were told by the Financial Services Authority last summer, was guilty of “unprecedented misconduct”. For five years, from 1998 to 2003, the company had repeatedly misled shareholders over its oil and gas reserves. It was so culpable that the regulator felt it had no choice but to fine it a then-record £17 million.

Yet we are now asked to believe that no one running the company at the time was actually to blame. The FSA yesterday dropped its investigation into and proceedings against the former chairman, Sir Philip Watts, and other unnamed individuals. After an 18-month inquiry the regulator’s enforcement arm had assembled a case against the individuals. But its Regulatory Decisions Committee, which makes the final judgment, was unconvinced. Or was it simply unwilling? For years the FSA has banged the drum about how it would hold senior figures to account when companies broke the rules. Yet time and again, the FSA finds companies guilty of serious offences while failing to secure individual scalps. The Citigroup bond trading scandal ended with all the traders who had been involved reinstated and no senior figure so much as formally reprimanded by the authorities. read more

Shell settles fraud case for $150M

FROM OUR AUGUST 2004 SHELL NEWS ARCHIVE

CNN: Shell settles fraud case for $150M

Oil company agrees to pay SEC for overstating reserves, also settles market abuse case in Britain.

August 24, 2004

NEW YORK (CNN/Money) – Royal Dutch/Shell has agreed to pay about $150 million to settle charges by U.S. and British regulators that it vastly overstated oil reserves.

Under the settlement, Shell has also agreed to commit another $5 million to establish an internal compliance program under the direction and oversight of the company’s legal director, the Securities and Exchange Commission said in a statement.

The company units cited by the SEC, Royal Dutch Petroleum and Shell Transport, neither admitted to or denied any wrongdoing, the commission said. read more

Tainted ‘symbiotic partnership’ between Brunei regime and Shell

His Majesty the Sultan of Brunei meeting Malcolm (TFA) Brinded, Shell’s Executive Director, Upstream International.

By John Donovan

On Sunday 1 January, the Borneo Bulletin published a gushing article under the headline “Oil & Gas continues to shower Brunei with benefits, opportunities“.

It described a claimed lovefest relationship between Royal Dutch Shell and the Brunei Royal family, which the Sultan of Brunei has summed up as: “the extraordinary symbiotic partnership between the Sultanate and the global oil giant… Royal Dutch Shell… read more

London Evening Standard: Ex-Shell boss in showdown with FSA

London Evening Standard: Ex-Shell boss in showdown with FSA

“The case is crucial for Watts as the US Department of Justice is ‘still evaluating’ criminal action against Shell directors.”: “Watts is named in US class action lawsuits seeking ‘unspecified damages’ from present and former directors.”

Monday 25 July 2005

James Rossiter,

FORMER Shell chairman Sir Philip Watts and the Financial Services Authority (FSA) were today set to clash in a key hearing that could determine the city regulator’s legal rights and powers of investigation.

Watts claims he was ‘identified and prejudiced’ when the FSA explained in a public announcement why it fined the oil giant a record £17m last August over its reserves fiasco. The case is crucial for Watts as the US Department of Justice is ‘still evaluating’ criminal action against Shell directors. read more

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