The Times: Shell inquiry widens as attention turns to executives: “THE US Attorney’s office in New York has demanded boxes of documents related to the alleged oil reserve fraud at Royal Dutch/Shell, signalling an escalation of a federal investigation into the scandal.”: “disgruntled American investors amended their lawsuit to include Sir Mark Moody Stuart…”: “The lawsuit also names PriceWaterhouseCoopers UK and KPMG” (ShellNews.net)
From James Doran, Wall Street Correspondent
September 15, 2004
THE US Attorney’s office in New York has demanded boxes of documents related to the alleged oil reserve fraud at Royal Dutch/Shell, signalling an escalation of a federal investigation into the scandal.
It is understood that federal investigators are now looking into the activities of individual Shell directors who are named in class action lawsuits surrounding the scandal, rather than seeking to prosecute the company as a whole.
The demand marks a dramatic shift in the inquiries under way at Shell, which had until now been involved in civil investigations led by the US Securities and Exchange Commission, the market watchdog, and the Financial Services Authority, its British equivalent.
The surprise request was revealed in a New Jersey courtroom on Monday when lawyers presenting a class action lawsuit on behalf of American investors in Shell appeared before Judge Donald Haneke to update their claim.
A clerk at Judge Haneke’s chambers confirmed that the lawyers had asked for a 60-day delay in presenting some Shell documents to the court because the US Attorney’s office for the Southern District of New York had asked to see them.
Shell is accused of misleading investors by overstating its oil reserves between 1998 and last year.
Sources close to the case said that Michael Schachter, the Assistant US Attorney for the Southern District of New York criminal fraud division, had called the lawyers to make the request for documents.
The sources said that the investigation was at the earliest of stages and that no arrests or indictments were foreseen at present.
“The US Attorney’s office asked for the documents so they could investigate the matter,” a source close to the case said. “They said their investigations may include certain individual defendants in the class action.”
Mr Schachter is one of the best-known fraud investigators in America, having played a significant role in the prosecution of Martha Stewart, the celebrity homemaker convicted for her part in an insider-trading scandal.
Mr Schachter’s office declined to comment.
News that federal investigators are looking into Shell emerged as lawyers representing disgruntled American investors amended their lawsuit to include Sir Mark Moody Stuart and Paul Skinner for the first time.
Sir Mark was chairman of Shell Transport from 1997 to 2001, while Paul Skinner was chief executive of Shell Oil Products and group managing director from 1999 until his retirement in 2003.
The lawsuit also names PriceWaterhouseCoopers UK and KPMG, the accountancy firms, and says that both were responsible for compiling the accounts that contained misleading information about the amount of oil Shell had in its reserves.
http://business.timesonline.co.uk/article/0,,8209-1262768,00.html