The Guardian (UK): Shell hits self-destruct button: “Shell will start the new year with a mountain to climb to re-establish its reputation after the most traumatic period in its 100-year history, with its chairman and two directors axed, legal action against it and condemnation by regulators.”: “An internal inquiry later came up with astonishing evidence that Sir Philip and Mr Van de Vijver were at war for years over the reserves issue. "I'm sick and tired about lying" said Mr Van de Vijver in one email.” (ShellNews.net) 31 Dec 04
Terry Macalister
Friday December 31, 2004
Shell will start the new year with a mountain to climb to re-establish its reputation after the most traumatic period in its 100-year history, with its chairman and two directors axed, legal action against it and condemnation by regulators.
It was a measure of its complacency that the Anglo-Dutch oil group used a lowly manager to press the self-destruct button on January 9. Its chairman, Sir Philip Watts, was nowhere to be seen when Shell calmly announced it was planning to cut its proven reserves figure by 20% to bring itself in line with US requirements.
Its shares nose-dived as equity analysts feared the move would hit cashflow and punished the company for a lack of real explanations.
It was not until a month later that Sir Philip - seen by critics as arrogant and taciturn - tried to answer his main shareholders, by then demanding a complete shake-up in corporate governance. To a hushed meeting at the Tower Thistle Hotel in London he expressed "unqualified" regret for not personally revealing the bad news while insisting he would not stand down.
He soldiered on until March before throwing in the towel with exploration chief Walter van de Vijver - and later finance boss Judy Boynton.
An internal inquiry later came up with astonishing evidence that Sir Philip and Mr Van de Vijver were at war for years over the reserves issue. "I'm sick and tired about lying" said Mr Van de Vijver in one email.
There were further downgrades to come as the company faced $1bn lawsuits from US institutional investors plus investigations by the US securities and exchange commission and other regulators.
The Financial Services Authority finally accused Shell of "unprecedented misconduct" and fined it £17m while the SEC levied a £67m fine.
Shell has since made Jeroen van der Veer its head and promised a more regular company structure. Its share price is now well ahead of where it was a year ago.
http://www.guardian.co.uk/business/story/0,,1381218,00.html