Financial Times: Lombard: Sir Philip comes out fighting: “Much more than personal reputation looks at stake here. The FSA has not closed its inquiry into Shell, and Sir Philip's lawyers indicated on Thursday there was an ongoing investigation in relation to him.” (ShellNews.net)
By Martin Dickson
Published: September 16 2004
Posted 17 Sept 04
FSA findings challenged before tribunal
If attack is the best form of defence, Sir Philip Watts, the former chairman of Royal Dutch/Shell, struck a timely blow on Thursday - albeit one of uncertain impact.
In a remarkable move, he filed an action before the Financial Services and Markets Tribunal - the body that can re-examine decisions of the Financial Services Authority - complaining that the FSA had violated his rights on August 24 when it published a "final notice" documenting its reasons for fining Shell £17m over its oil reserves scandal.
The FSA document did not name Sir Philip, but he argues he was readily identifiable from it. Certainly, given he is the man forced to resign following the scandal and been pilloried in the press over it for much of this year, an alert reader just might draw a connection between the FSA's strictures and the person of Sir Philip.
His complaint is twofold. First, that, given his involvement, the FSA failed to afford him his statutory rights of making representations and reviewing the evidence against Shell. Second, that the FSA's findings against Shell are flawed and that he personally acted properly and in good faith at all times.
Much more than personal reputation looks at stake here. The FSA has not closed its inquiry into Shell, and Sir Philip's lawyers indicated on Thursday there was an ongoing investigation in relation to him. The FSA's final notice about Shell had, they argued, unfairly pre-judged matters relevant to that case.
It would be unwise to second- guess the tribunal's response, when it eventually gets to hear the case. But Sir Philip's move highlights some of the potential problems that can arise from two new thrusts of FSA policy.
First, it wants to make senior managers in the financial services industry and beyond take greater responsibility for their actions - on the grounds that this will spur better corporate behaviour. It has begun to fine individuals and has indicated that it intends to get tougher. But pursuing parallel cases against companies and their executives can create serious legal complexities.
Second, the FSA recently announced that it was speeding up its investigatory process, which has long been criticised for being far too slow. In its press release on August 24, the authority boasted of the "swift resolution" of the Shell case. But Sir Philip is now trying to turn that against it, claiming early publication has been at the expense of a proper investigation.
One thing is sure. There will be no swift resolution of its tussle with Sir Philip.