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Shell CEO Ben Van Beurden wiretapped by Dutch Public Prosecutors

English translation of an article published by Dutch newspaper ncr.nl on 26 March 2019. The extensive parts of the article relating to Ben van Burden and Shell are in bold print. 

 

Are top managers being bugged?

White collar, dirty hands? You don’t have to be a suspect of cocaine smuggling in the Netherlands to be overheard by the judiciary. In recent years, the telephones of at least two board chairmen have been tapped. Maybe even more. They never put such information in an annual report.

The first was Theo Bruijninckx, chairman of the board of the then already financially weakened construction company Ballast Nedam. In the spring of 2012, he was intercepted on various telephones (home, mobile, at the office). He was not a suspect, but justice was looking for information about an older bribery case. Ballast Nedam was taken over by the Turkish conglomerate Rönesans after a series of losses in 2015.

The other is Ben van Beurden, CEO of the Shell energy group. He is not suspected of bribery either. On 17 February 2016, the day of a raid by Shell by the Public Prosecution Service, Van Beurden was intercepted. He called Simon Henry at the time about what had happened that day. We know thanks to a leak to the Buzzfeed news site. The two were not talkative. Did they suspect something?

That Shell investigation is about possible bribery in Nigeria. Shell and the Italian oil company Eni bought an oil field called OPL 245 there in 2011. Part of the acquisition price of 1.3 billion dollars found its way to Nigerian politicians and officials.

There is already a lawsuit in Milan. But there is also a question for that other arena, the shareholders’ meeting. In February, the Dutch judicial authorities informed Shell that there will be a criminal prosecution. Does this have consequences for the rewards of current and former top managers?

Van Beurden touched 20.1 million euros in remuneration last year, mainly in the form of Shell shares.

Large companies sometimes make a completely wrong assessment of judicial investigations. The supervisory directors of ING gave CEO Ralph Hamers a reward increase of 50 percent last year, while a criminal investigation into money laundering was ongoing. The first was cancelled after a storm of criticism. The second ended in a record settlement of 775 million euros, which made the earlier remuneration proposal even more incomprehensible. ING’s top management cancelled its claim for a bonus for 2017.

However, the relationship between settlements and personal financial consequences is not clear. SBM Offshore, a floating oil storage platform operator, carried out major cleaning at the top in 2011 and 2012 after several bribery affairs. The newcomers to the board did not feel the later settlement with the judiciary (216 million euros) in their pocket.

In 2013, Rabobank settled with the judiciary in connection with fraud in interest rates. That cost 774 million euros. Two drivers left. The top lost money. The bank reclaimed millions from traders involved.

The Shell commissioners saw in the OPL 245 court case in Italy last year to form a separate committee from their midst who closely follows the procedure. The case is a bone in Shell’s throat. Will the group want to make it to a public hearing in the Netherlands? Companies prefer settlements. But does the justice department still want this after all the fuss about the agreements with ING and Rabobank? And at what price?

Shell is so intertwined with politics (energy transition, Groningen gas, bid for Eneco) that a conviction is extremely harmful. Then just dock. Can the top lag behind the penny in the collection bag? No. But without acknowledging guilt.

Menno Tamminga writes here every Tuesday about corporate policy and economy.

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