THE TIMES: Shell looks to put scandal behind it with settlements: “SHELL is seeking to settle class action lawsuits brought against the company and its former directors after last year’s revelation that the company had overstated its proven oil and gas reserves.”: “Shell will likely have to pay large sums to lawyers representing plaintiffs in four shareholder derivative actions in US courts. These are claims seeking “unspecified damages” from present and former Shell directors. The company said recently it was seeking to settle the derivative actions and a class action brought on behalf of employee retirement plans.”: Friday July 01, 2005
By Carl Mortished
SHELL is seeking to settle class action lawsuits brought against the company and its former directors after last year’s revelation that the company had overstated its proven oil and gas reserves.
Shell received a boost yesterday when the US Department of Justice said that it would not prosecute the company. “Criminal prosecution of Shell would not serve the public interest,” said David Kelley, US attorney for the southern district of New York.
Mr Kelley cited Shell’s cooperation with the inquiry, its remedial efforts and the payment of a $120 million (£67 million) fine to the US Securities and Exchange Commission. “The public interest has been sufficiently vindicated,” he said.
The US attorney also expressed concern about the impact of further proceedings on the company. He said: “Criminal prosecution would likely have a severe and unintended disproportionate economic impact upon thousands of innocent Shell employees.”
The decision by the department refers specifically to the prosecution of Royal Dutch Petroleum and Shell Transport & Trading, the two Shell parent companies. No indication was given whether the department intends to take action against individuals, notably Sir Philip Watts and Walter van de Vijver, respectively former chairman and exploration director of Shell who were fired over the reserves misreporting.
Shell has advanced $12 million in legal aid to former directors, some of which may relate to a dispute between Sir Philip and the Financial Services Authority. The former Shell chairman is suing the FSA, alleging his rights were infringed by statements made by the authority last year when Shell agreed to pay a fine of £17 million.
Shell will likely have to pay large sums to lawyers representing plaintiffs in four shareholder derivative actions in US courts. These are claims seeking “unspecified damages” from present and former Shell directors. The company said recently it was seeking to settle the derivative actions and a class action brought on behalf of employee retirement plans.
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