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”.
An independent review commissioned by Shell criticised both men, who were forced to step down in March.
Unbelievably, Watts pocketed severance worth £1m, although he did forfeit performance-related payments and stock options. The bluff businessman now faces the prospect of multiple lawsuits from disgruntled investors and a possible criminal prosecution by the US Justice Department. Van der Vijver, who might also be charged, can console himself with a whopping £2.5m payout.
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