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Mail on Sunday: Chairman Jeroen van der Veer in frame over Shell scandal – could lead to 20 years in jail

Mail on Sunday: Chairman Jeroen van der Veer in frame over Shell scandal – could lead to 20 years in jail

Patrick Tooher,

6 June 2004

SHELL chairman Jeroen van der Veer could face criminal prosecution in the US after signing accounts that massively overstated oil and gas reserves.

The revelation is another blow to Shell. Throughout the reserves fiasco, it has presented van der Veer as Mr Clean.

Van der Veer is bound to be questioned again about his role in the scandal when he meets leading shareholders this week.

Financial Mail has established that van de Veer, ex-chairman Sir Philip Watts and former finance director Judy Boynton put their names to statements required by the Sarbanes-Oxley Act. The Act came into force in 2002 after the WorldCom and Enron scandals.

Under it, chief executives and finance directors must certify the accuracy of financial statements and other disclosures. Miscertifying can lead to 20 years in jail and a $5 million (£2.7 million) fine.

Crucially, van der Veer, Watts and Boynton certified that the 2002 reports of Shell and sister company Royal Dutch did not contain ‘any untrue statement’.

Shell stunned investors this year by admitting that its oil and gas reserves had been overestimated by a fifth. Watts, Boynton and exploration chief Walter van de Vijver were sacked, but van der Veer survived.

A report into the scandal by US law firm Davis Polk & Wardwell appeared to pin the blame on Watts, Boynton and van de Vijver, but left van der Veer in the clear.

At the request of the US authorities, Shell has not published the full report. But even the executive summary reveals van der Veer knew early in 2002 of Shell’s precarious position over guidelines on reserves set out by the US stock market regulator, the Securities and Exchange Commission.

In March last year, van der Veer, Watts and van de Vijver signed Shell’s 2002 report and accounts for the SEC – without any adjustment for five billion barrels of overbooked oil and gas reserves.

In addition, van der Veer, Watts and Boynton separately signed the Sarbanes-Oxley statement.

Van der Veer later said he was aware that reserves were low two years before Shell admitted it, but insisted he did not know the extent of the overbooking.

A Shell spokesman said: ‘We can’t comment on matters under investigation in the US.’

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