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FINANCIAL TIMES: LETTERS TO THE EDITOR: THE DOUBLE STANDARDS OF SIR MARK MOODY-STUART

ShellNews.net: FINANCIAL TIMES: LETTERS TO THE EDITOR: THE DOUBLE STANDARDS OF SIR MARK MOODY-STUART

Tuesday 5 July 2005

By John Donovan

ShellNews.net Editor and a Shell shareholder

Sir

I am writing with regard to the letter from Sir Mark Moody-Stuart published by The Financial Times on 30 June 2005 under the headline: “Enjoy a free trip and get to ask Shell a question.”

In his letter Sir Mark questioned the independence of individuals who asked questions at his final AGM as a Shell Transport director. He also made reference to the “Alternative Shell Report” published by the Friends of the Earth. I note that Tony Juniper, Executive Director of the FOE subsequently confirmed that the FOE did not pay for the relevant individuals to travel to the AGM as Sir Mark had wrongly alleged.

It is a bit rich for Sir Mark to make such an unfounded comment bearing in mind the question mark over the purported independent endorsement of The Shell 2003 Report by Transparency International which Shell circulated to its shareholders last year.

A section on page 25 was devoted to Shell’s reputation. Alongside the hype about survey results carried out in 2003, was an endorsement of Shell’s ethical policies by “Transparency International” – which promotes business ethics and, as its name implies, “transparency”. The organisation’s endorsement was within the stated context of the so-called “Panels of external experts”, who “gave their independent views of how well Shell has performed.” All very impressive!

However, it was not disclosed that Mr George Moody-Stuart, an Executive Committee member of the organisation (and its former Chairman) is the brother of Sir Mark, who at the time, was still a Shell director. Is it possible that Shell shareholders would have been less impressed about the “independent” endorsement if they had known about that undeclared connection?

Perhaps because of my protests to Shell last year on the subject, instead of an “independent endorsement” by Transparency International, there is this year an “Independent Assurance Report” by KPMG and PriceWaterhouseCoopers, who have provided “an independent opinion on information contained in the 2004 Shell Report”.

However, KPMG and PriceWaterhouseCoopers earn huge sums as Shell auditors and are named Defendants in a multi-billion dollar class action law suit brought against Shell in the US courts by the lead plaintiff lawyers, Bernstein Liebhard & Lifshitz LLP.

It states in section 8 their Amended Complaint: –

PricewaterhouseCoopers UK and KPMG NV: –

(a) Individually and jointly issued materially false and misleading audit opinions and made false representations.

(b) Improperly acted as both Shell auditors/consultants and consequently suffered from disabling conflicts of interest. This dual role violated Generally Accepted Accountancy Principles in the U.S. and contravened the spirit of the US Securities & Exchange Commission rules regarding auditor independence and thus compromised their required auditor independence.

(c) In the five years from 1998 to 2002 inclusive the combined remuneration received from Shell by PwC and KPMG was $96 million in Audit fees and a staggering $185 for “non-audit” services. The fees were of great importance to the partners in PwC and KPMG as part of their income was dependent on the continued business with the Shell Group who were “crown jewel” clients.

Under the circumstances I do not feel in the least bit “assured” as a Shell shareholder by this latest so-called independent opinion.

Yours sincerely

John Donovan

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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