The Times: Ousted Shell chief takes FSA to court: “The FSA accused Shell of “unprecedented misconduct” resulting in market abuse and breach of listing rules.” (ShellNews.net)
By Patrick Hosking, Investment Editor
September 17, 2004
SIR PHILIP WATTS, the ousted chairman of Shell, is taking the Financial Services Authority to court, claiming it treated him unfairly in its judgment on the oil group’s reserves mis-statement scandal.
Sir Philip yesterday announced plans to challenge the regulator in the Financial Services and Markets Tribunal, the appeal court for FSA decisions.
He accused the FSA of unfairly blackening him and prejudicing a continuing FSA investigation into his conduct when it fined the oil company £17 million last month for misleading shareholders.
The FSA report accompanying the fine was “flawed” and the FSA had treated him “unfairly” in its haste to publish, Sir Philip claimed.
“I have instructed my lawyers to file an application in the tribunal regarding the FSA’s breach of section 393 of the Financial Services and Markets Act 2000 and the harm subsequently caused to me,” he said.
Section 393 says that people identified in FSA reports should be given an opportunity to review and rebut allegations. Although not named in the report, Sir Philip believes that he was “identified and prejudiced” by its publication.
Yesterday’s statement — made through his lawyers, Herbert Smith — is Sir Philip’s first public utterance on the affair since he was sacked in June with a £1.05 million pay-off and a £584,000-a-year pension.
Sir Philip said that he had always acted properly and in good faith and that he wanted a tribunal hearing to show it. He is understood not to be seeking compensation, but the chance to clear his name. He is thought to see the report as “criticism by the back door”.
In August Shell was criticised by the FSA and the US Securities and Exchange Commission, which fined it a further $120 million (£66 million), for misleading investors by overstating reserves of oil and gas between 1998 and 2003. The FSA accused Shell of “unprecedented misconduct” resulting in market abuse and breach of listing rules.
Sir Philip and other directors face class-action lawsuits from shareholders.
The FSA had no comment. Shell declined to comment.