April 12, 2007
Steve Hawkes and Michael Herman
An American law firm will make £24 million in fees after securing an historic $450 million (£228 million) compensation payout for thousands of Shell shareholders following the oil group’s reserves scandal in 2004.
An insider at the Anglo-Dutch group told The Times yesterday that it was paying the Delaware-based Grant & Eisenhofer an amount equal to about 10 per cent of the settlement. This will come on top of the money earmarked for investors.
Despite the size of the legal bill, shareholders said yesterday that they were pleased with the agreement, the largest of its kind seen in Britain.
Shell has agreed to pay $352.6 million to pension funds, and institutional and private investors across Europe to compensate for the share-price plunge after the reserves crisis. The beneficiaries include Morley Fund Management and AXA.
Shareholders are also set to receive another $96 million originally paid by Shell as a fine to the US Securities and Exchange Commission. A separate agreement with US investors is expected within weeks.
Three years ago, Shell admitted that it had overstated the amount of proven oil and gas reserves on its books by more than 20 per cent. Sir Philip Watts, chief executive, and Walter van de Vijver, head of exploration, resigned.
Beat Hess, Shell’s legal director, said that the compensation was a step in drawing a line under the scandal.
Any shareholder who bought Shell shares outside the United States between April 8, 1999, and March 18, 2004, can make a compensation claim under the agreement. Mr Hess said private investors could receive around 13p per share, although it may take two years for the money to come through.
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article1642757.ece
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