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Daily Express: Shell pays £52m to help settle reserves actions

Daily Express: Shell pays £52m to help settle reserves actions

Posted Tuesday 19 July 2005

By Andrew Johnson

Published 13 July 2005

SHELL is close to settling one of the three major class actions it was facing in the US in the wake of last year’s reserves scandal.

The Anglo-Dutch oil giant has agreed to pay, subject to court approval, $90 million (£52 million) to a clutch of pension funds run for its US staff.

It is the latest move by the group to draw a line under the affair which saw nearly 6 billion barrels wiped from its reserves which had been artificially inflated.

Shell’s legal director, Beat Hess, said yesterday: “Shell believes this is a good settlement for pension plan participants and for the companies. “We are hopeful the court will approve the settlement, which represents an important step toward putting litigation relating to the reserves re-categorisations behind us.”

The company said $25 million of the settlement was covered by insurance. It will also pay $1 million in fees to the lawyers who brought the action.

Shell has applied to have a second class action brought by a group of shareholders dismissed and is negotiating settlement of a third. Meanwhile, the company is still being probed by the owner of the Amsterdam stock exchange, Euronext, the Dutch financial watchdog, and regulator the Californian Department of Corporations.

It has already paid Britain’s watchdog, the Financial Services Authority, £17million and a further $120 million to the US Securities Exchange Commission. The US Department of Justice has dropped a criminal investigation.

The scandal cost executive chairman Sir Philip Watts, exploration chief Walter van de Vijver and finance director Judy Boynton their jobs. It also forced the company to change its complicated two-board structure into one with a more conventional and transparent single board.

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