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Shell's lies finally catch up with them,,2054430,00.html
Shell payout to settle reserves case - without admitting blame
Graeme WeardenWednesday April 11, 2007Guardian Unlimited

A North Sea oil rig

Royal Dutch Shell has agreed to pay $352.6m (£178m) to settle legal action brought by shareholders after it admitted overstating its oil and gas reserves.

The proposed settlement has been accepted by several institutional investors based outside the US and a group that represents individual shareholders, it said. They lodged claims against the oil giant after it announced in early 2004 that it was downgrading its reserves by 20%.

Shell said it had reached the proposed agreement "without admitting any wrongdoing". It will pay $340.1m to investors based outside the US who bought shares in the company between April 8 1999 and March 18 2004, plus $12.5m to be divided equally among all shareholders who have submitted a valid claim. A further $6.25m will be provided to groups that help individual investors prepare compensation claims.

Shell's market capitalisation plunged by £3bn on January 9 2004 when it shocked the market with the revelation that it had mis-stated the value of its oil and gas reserves by a fifth. Two months later it said the figure was closer to 25%.

It was subsequently fined £17m by the Financial Services Authority, which castigated the firm for serious market abuse and making false and misleading statements.

The scandal also cost chairman Sir Phillip Watts his job. He was sacked by the board, as was exploration director Walter van de Vijver, after it emerged that they had known about the mis-statement problem for at least two years before it was made public.

Shell said today that it had also agreed to ask the US Securities and Exchange Commission to distribute to shareholders $120m it paid in 2004 following an SEC investigation into the reserves restatement.

It also said it plans to offer the same proportional settlement to US investors as the one outlined today, provided the US court overseeing the case approves.

The proposed settlement announced today depends on the Amsterdam Court of Appeals declaring the settlement binding for the shareholders it covers, and is subject to opt-out provisions.

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Posted Date: 
4 April 2007 - 8:02pm