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Daily Telegraph: Shell rebel investors dig their heels in

Daily Telegraph: Shell rebel investors dig their heels in

“David Windsor-Clive, 44, another dissident shareholder and former banker who is facing a £600,000 tax bill on a £2m family holding in Royal Dutch, said he was considering suing Shell if it failed to ease the tax hit.”

Thursday 11 August 2005

By Christopher Hope, Business Correspondent (Filed: 11/08/2005)

A stubborn rump of rebel shareholders in Royal Dutch Petroleum has failed to accept the terms of the merger with Shell Transport and Trading to create Royal Dutch Shell.

British investors in Royal Dutch are holding out because they face a large capital gains tax bill as a result of the restructuring to form a £128.7billion oil and gas giant.

David Hunter: facing a tax bill of tens of thousands of pounds

Shell announced yesterday that, after the offer period had been extended for several weeks, 1.3pc of the shareholders in Royal Dutch had failed to accept the terms. The news prompted Shell to reiterate its threat “to use any legally permitted method to obtain 100pc of the Royal Dutch shares”.

It continued: “This could include a squeeze out procedure, engaging in one or more corporate restructuring transactions such as a merger, liquidation, transfer of assets or conversion of Royal Dutch into another form or corporate entity”.

However, the rebels were not cowed. David Hunter, 69, a director of Smith and Williamson Investment Management in the City, is facing a bill running into tens of thousands of pounds on his 2,000 Royal Dutch shares.

He said: “The most extraordinary thing is that they admit they knew about this before the deal was done.

“They just don’t give a damn. It is totally shoddy. I want an appropriate number of shares, rather than paying the tax.”

Peter Buckley, another rebel and the chairman of Caledonian Investments, is facing a tax bill running into “tens of thousands of pounds”.

He said: ” ‘You can be sure of Shell’ has disappeared. It is sad and careless.”

Julian Mathias, 61, who lives in west London, said his 92-year-old mother was facing a £21,000 bill on a £76,000 taxable gain as a result of the shake-up.

He added: “It is a complete mess. I think Shell should pick up the bill.”

David Windsor-Clive, 44, another dissident shareholder and former banker who is facing a £600,000 tax bill on a £2m family holding in Royal Dutch, said he was considering suing Shell if it failed to ease the tax hit.

Mr Windsor-Clive said: “It has been our holding since the 1970s. We are considering legal action, but we want to see what they offer. If they offered a share for share swap with no tax liability we would accept it.”

Charles Butter, 45, another rebel, complained that shareholder loyalty during the company’s crisis of its “lost” reserves was not being rewarded.

He added that there had been no similar tax hit when Reed Elsevier, the Anglo-Dutch media group, came together nor when the US banking giant JP Morgan bought Robert Fleming, the British merchant bank, five years ago.

The British investors in Royal Dutch are hoping that a meeting between the Association of Private Client Investment Managers and Stockbrokers tomorrow might provide a solution.

There has already been a glimmer of hope. In a letter to one shareholder on July 19, Shell Transport’s chairman Lord Oxburgh admitted the company was still in talks with the Inland Revenue about the problem.

Lord Oxburgh said Shell “has continued to hold discussions with the UK tax authorities to secure relief for people in your position but these have so far not been successful”.

However, sources close to Shell last night said the talks had now concluded.

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