The Herald: Banks to help Shell restructure: “Shell is still facing a legal investigation into the reserves debacle”

BEN GRIFFITHS July 14 2004  

TROUBLED oil giant Shell yesterday appointed City banks Citigroup and NM Rothschild to help it decide on the options for changing the company's structure and governance.

An internal steering group, set up a month ago, is investigating the scope to simplify Shell's board and group management structures.

The move follows the Anglo-Dutch company's humiliating admission it had overbooked oil and gas reserves by 20% which led to the ousting of several senior executives including Sir Philip Watts, the group's chairman, and sent the share price tumbling.

Shell is still facing a legal investigation into the reserves debacle by regulators including the US Securities & Exchange Commission, the UK Financial Services Authority and the US Justice Department. It also faces lawsuits from shareholder groups.

Since the annual meetings of Amsterdam-listed Royal Dutch Shell and UK-based Shell Transport & Trading, the steering group has been in discuss-ion with major investors. Shell has said it intends to publish the results of the review of governance and structure in November so that it can present solutions to shareholders at its annual meeting in April 2005.

The scandal over Shell's reserves recategorisation highlighted a failure amongst top figures on the committee of managing directors, which has been in place since 1907 to oversee both companies, to communicate mounting problems.

http://www.theherald.co.uk/business/20004.html