The Independent: Why so shy, Shell?

By Clayton Hirst

20 June 2004

What a coincidence. Two of Shell's larger US shareholders, Calpers and Knight Vinke, wrote a pointed letter to the FT on Wednesday, criticising the troubled oil company for keeping them in the dark on the details of its wide-ranging review. Lo and behold, the next day Shell reveals details of its review and admits that it will do away with its so-called priority shares - which carry extra voting rights - controlled by the management of the group.

Shell should be applauded for scrapping this arcane tradition, but before we run away with the praise, two things must be borne in mind.

First, Shell had the audacity on Thursday to claim its disclosure had nothing to do with shareholder pressure. If you believe that, you believe Shell's 2002 oil reserves statement was spot on.

Second - and I am assuming you don't have a great deal of faith in the statement - why did it take weeks of nagging by shareholders and finally a threat of awkward questions at the AGM for Shell to open up?

Investors are worried that Shell still has something to hide. Being needlessly secretive and evasive will do nothing to convince the City that it can be trusted again.

Clayton.hirst@independent.co.uk

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