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Lloyds List: Shell pays $90m to settle law suit from employees whose savings fell

Lloyds List: Shell pays $90m to settle law suit from employees whose savings fell

“ROYAL Dutch Shell has agreed to pay more than $90m to settle a law suit issued by its own employees…”

Wednesday 13 July 2005

By Martyn Wingrove

ROYAL Dutch Shell has agreed to pay more than $90m to settle a law suit issued by its own employees who lost retirement savings value when the firm’s share price sank last year.

The Anglo-Dutch oil giant was hit with a class action law suit from employees when their savings plans lost value because Shell’s share price tumbled during the reserves scandal last year.

The world’s third largest oil company revealed it had exaggerated the volume of oil and gas resources booked as proven for years last year and slashed proved reserves by almost a third.

This led to investigations by regulatory authorities in the US and Europe and class actions by shareholders unhappy that the company’s stock price fell.

‘We are hopeful that the court will approve the settlement, which represents an important step towards putting litigation relating to the reserves categorisation behind us,’ said Beat Hess, Shell’s legal director.

The reserves scandal had major ramifications for Shell, leading to the sacking of boss Sir Philip Watts and unification of the two management boards.

There are two more class actions pending that Shell needs to deal with before the oil major can get over the whole reserves recategorisation issue.

‘We are in discussion with those behind the shareholders derivative action and still pending is the shareholder class action,’ said a spokeswoman. Insurance will cover $25m of the settlement if it gains court approval. Shell will also pay over $1m in lawyers’ fees.

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