Royal Dutch Shell Plc  .com Rotating Header Image

Ex-Shell boss loses showdown with London market watchdog

Ireland On-Line: Ex-Shell boss loses showdown with London market watchdog

“In addition to the FSA action, the fiasco brought Shell a $120m (€97.8m) fine from the Securities and Exchange Commission in the United States for violating record-keeping, reporting and anti-trust rules.”

Tuesday 13 Sept 2005

Former Shell chairman Philip Watts today lost a showdown with the London market watchdog into how it handled the investigation into the oil giant’s reserves crisis.

Watts had accused the Financial Services Authority (FSA) of violating his statutory rights by fining Shell a record £17m (€25.2m) without giving him a chance to respond.

His case – presented to an independent tribunal – was based on the claim that he was identified and prejudiced by the FSA when it issued a public notice penalising Shell.

Watts claimed anyone would understand that the FSA was not criticising the conduct of “some faceless company”, but the roles played by individuals in the reserves debacle.

This was particularly unfair as Watt’s role in the crisis at Shell was being considered separately by the FSA and this process has still not bee concluded, according to his legal team.

However, the tribunal rejected this argument because Watts was not explicitly named in the notice issued by the FSA, leaving the ex-Shell boss to vow today that he would continue the fight to clear his name.

The Financial Services and Markets Tribunal said in its ruling: “The fundamental point is … that the criticisms in it are made at the level of corporate personality, and are not made of individuals whether singularly or collectively.”

But the tribunal also stressed that the decision “involves no criticism of any kind’ against Watts and that it did not consider whether the facts that led the FSA to fine Shell were justified or not.

Watts joined Shell in 1969 and rose through the ranks to become chairman in the summer of 2001, but was forced to resign two months after the oil giant cut its reserves by 20% in January last year.

Shell has since downgraded its reserves a further four times, meaning they are now 4.47 billion barrels lower than previously thought at the start of 2004.

In addition to the FSA action, the fiasco brought Shell a $120m (€97.8m) fine from the Securities and Exchange Commission in the United States for violating record-keeping, reporting and anti-trust rules.

Watts expressed his disappointment at the tribunal’s decision and his team at London law firm Herbert Smith were giving careful consideration to its reasoning.

In a statement, Herbert Smith said: “Sir Philip continues to believe that the FSA’s factual findings in the final notice against Shell are flawed. Sir Philip acted properly and in good faith at all times.

“He will continue his fight to clear his name and believes that he will be vindicated if any proceedings are instituted against him.”

In a short statement following the ruling, the FSA welcomed “the clarification of the law in relation to the rights of third parties”.

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.

0 Comments on “Ex-Shell boss loses showdown with London market watchdog”

Leave a Comment

%d bloggers like this: