Daily Mail: Shell aims to quell rebellion: "The National Association of Pension Funds... is preparing to publish its report into the scandal-hit oil giant this week"

Brett Arends,

14 June 2004

SHELL is racing to head off a potential shareholder revolt at its annual general meeting. Top brass are meeting investors and City pressure groups in a bid to prevent a storm at the meeting in just a fortnight.

'We're in discussions with shareholders and we are taking their concerns seriously,' the company confirmed.

The National Association of Pension Funds, whose members own 20% of the stock market, is preparing to publish its report into the scandal-hit oil giant this week.

In an ominous sign, senior NAPF figures have visited Shell to express their worries. 'We engage with companies if we have issues relating to the agm,' said the NAPF. It declined to comment further.

The Association of British Insurers is preparing to publish a critical report.

Shell reeled this year after admitting that it had overstated its proven reserves by 25%. Three top directors were ousted in the aftermath. New boss Jeroen van der Veer was also touched by the affair.

Shell has set up a team to review its practices and organisation, whose byzantine nature was highlighted by the affair.

It promises an 'update' at the annual general meeting and firm proposals 'by early next year at the latest'.

Many investors are worried that the company is not moving swiftly enough. US fund management giant Calpers last week slammed it for weak performance and poor corporate governance - including an 'apparent inadequacy of controls'.

Struggling supermarkets group Sainsbury is also facing a rough ride. It plans to give shares already worth £2.4m to chief-executive-turned-chairman Sir Peter Davis. Many shareholders are unhappy that Davis was promoted at all after a mixed four years as chief executive.

Meanwhile, BP hit back at investment bank Goldman Sachs, which last week suggested that the oil group might be about to downgrade its own reserves in a US filing later this month. 'We are confident of the numbers in our annual report and we believe they meet the SEC regulations in all material respects,' it said.

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