Sunday Herald: Different approaches to dealing with shame: “Now, most people confronted with the evidence displayed in an e-mail trail between senior people in the company discussing reserves going back more than two years would have opted for keeping their headdown. Not Sir Philip.”: “Mind you, with the number of other investigations still being conducted into the Shell reserves affair, it was unlikely that Sir Philip was going to be free of “my learned friends” any time soon.” (ShellNews.net)

Scandal Monger

Ken Symon

19 September 2004

We saw two very different reactions from individuals to their embroilment in scandal over the last week and both were pretty surprising.

Sir Philip Watts caused more than a few raised eyebrows in business circles this weekend as he launched a fightback against the City watchdog, the Financial Services Authority (FSA).

In an interview with the Financial Times he challenged the FSA’s findings on the oil reserves scandal at Royal Dutch/Shell, where he was formerly chairman.

He launched the fight back following the FSA and US Securities and Exchange Commission notices three weeks ago announcing fines of $150 million (£84m) against the Anglo-Dutch company.

The watchdog bodies had been “hasty” in issuing their final notice on the subject, according to Sir Philip. They were, he concluded, “fundamentally flawed”.

Instead, if a “full and fair examination of the evidence” had been conducted, an independent tribunal would conclude Sir Philip “acted properly in good faith”.

In documents prepared by Sir Philip’s legal team, lawyers argue that the knight “is not an expert in the estimation of reserves or SEC reporting”. And the authorities were apparently wrong to focus on Sir Philip’s time as head of exploration and production. They argue that it amounts to a range of unfair actions.

Now, most people confronted with the evidence displayed in an e-mail trail between senior people in the company discussing reserves going back more than two years would have opted for keeping their headdown. Not Sir Philip. He has instead mounted his charger and is tilting his lance down the throat of the FSA.

In an 18-page critique of his treatment by the FSA his lawyers set out in no uncertain terms where he believes he was unfairly treated.

The matter should go to a tribunal likely to sit some time next year. Scandalmonger will be watching with interest to see how this one turns out.

Compare and contrast Sir Philip’s approach with that of US home design icon Martha Stewart, who has chosen to make a cell her home over the next five months.

Stewart opted for doing the jail time now rather than waiting the result of her appeal on a conviction for misleading prosecutors over a shares sale.

Opting for jail now would allow her to return to her “good life and good works” earlier than waiting, she announced last week from the steps of the headquarters of the company that still bears her name.

Appearing bitter and resigned, according to onlookers, she explained that this “harsh and difficult decision’ would allow her to achieve “finality” – not closure, note, but finality.

She had chose this option despite the fact that her prison term would deprive her of the chance to entertain and decorate during Thanksgiving, Christmas and New Year holidays.

“I am very sad knowing that I will miss the holiday season,” she told reporters. “And I will miss all of my pets – my two beloved, fun-loving dogs, my seven lively cats, my canaries, my horses and even my chickens.”

So Stewart has opted to lessen the time that the shadow of the wheels of justice hangs over her. She might, she hoped, be back home in time to begin a spring garden.

Instead, Sir Philip Watts has chosen a course of action which may, just may, clear his name as far as the regulators are concerned, while ensuring that his involvement with lawyers lasts for quite some time yet. And given that the lawyers are from the top City firm Herbert Smith, that is unlikely to be cheap.

Mind you, with the number of other investigations still being conducted into the Shell reserves affair, it was unlikely that Sir Philip was going to be free of “my learned friends” any time soon.