THE BUSINESS: CASE BUILDS AGAINST SHELL: "Shell’s embattled former and present management may have less than a month before new allegations are released."
By Richard Orange
Sunday 4 July 2004
The leading class-action lawsuit against Royal Dutch/Shell, expected to be one of the largest ever, has ground back into action after more than two months’ delay. Shell’s embattled former and present management may have less than a month before new allegations are released.
Judge John Bissel, who is adjudicating the case for the District Court of New Jersey, last week sent the prosecuting lawyer, New York’s Bernstein, Liebhard & Lifshitz, his formal opinion and order on the case, giving the firm 30 days to submit its allegations.
Bernstein is representing the Pennsylvania State Pension Fund, which has been appointed lead plaintiff in the case. “This will be the definitive instrument. This is going to give you the roadmap of the case,” Keith Fleischman, a partner at the firm, told The Business.
“We have found out a whole bunch of new information. The focus of our investigation, what we feel are the most important aspects of the case, will be in the amended complaint.”
Bissel had been expected to give the firm his final order on 14 May, but has been delayed by other cases. The plaintiffs are claiming upwards of $150m (£82.5m, Euro123m) in losses from the decline in Shell shares due to the reserves downgrade in January. The order, seen by The Business, accuses Shell of “issuing a series of materially false and misleading statements to the investing public between 1999 and 2004”.
Of present Shell executives, it names boss Jeroem van der Veer, exploration head Malcolm Brinded, and its former chief financial officer Judy Boynton, who is still employed in an undisclosed capacity at the firm.
It also names former executives Maarten van den Bergh, Harry Roels, Pail Skinner, Mark Moody-Stuart and Phil Watts, but not, significantly, former exploration chief Walter van de Wijver, who was forced to resign after it emerged he had fought Watts over his wish to disclose the reserves problems, but had failed to alert the board.
Last month, a second-class action suit was launched at the New Jersey state court, which reportedly also seeks to force Shell executives to return bonuses and severance payments.