The Independent (UK): Former Shell chairman accuses FSA of prejudice: “Representing the FSA, Anthony Grabiner QC dismissed Mr Pannick's claims, insisting that Sir Philip was not identified or prejudiced by its announcement of the fine. 'This is all nonsense,' he said.”: Tuesday July 26, 2005

James Daley

Sir Philip Watts, the former chairman of Shell, accused the Financial Services Authority of mischievous behaviour yesterday, claiming that its handling of disciplinary proceedings against the oil giant last year had been prejudicial towards him.

Speaking on behalf of Sir Philip at a one-day hearing of the Financial Services & Markets Tribunal in London, David Pannick QC criticised the regulator for failing to give Sir Philip a right to reply before it fined Shell a record pounds 17m for overstating its oil reserves last summer.

Although Sir Philip was not named within the FSA's announcement of the penalty when it was made public in August, Mr Pannick claimed his client was identified through the FSA's reference to Shell's annual report, which was signed off by Sir Philip.

Although the FSA's investigation into the conduct of Sir Philip and other individuals at Shell is ongoing, Mr Pannick argued that the regulator's move to publish details of the company's penalty had pre-judged any further inquiries into his client.

The majority of the hearing centred on the interpretation of a clause in the Financial Services & Markets Act " section 393 (4) " which stipulates that the regulator must provide a copy of enforcement decision notices to any individuals who may be identified and prejudiced by them.

Mr Pannick alleges that the FSA denied this right to his client. 'The FSA's attempt to carefully craft the decision notice to avoid express reference to [Sir Philip] by name, while in fact including reference to matters in the notice which are [in effect] findings against the applicant of knowing or negligent wrongdoing, is exactly the form of mischief against which section 393 (4) seeks to protect third parties,' Mr Pannick said.

He added that the regulator's treatment of his client had been 'unjust'. Representing the FSA, Anthony Grabiner QC dismissed Mr Pannick's claims, insisting that Sir Philip was not identified or prejudiced by its announcement of the fine.

'This is all nonsense,' he said. '[The FSA decision notice] did not allege knowing or negligent wrongdoing on the part of Sir Philip.'

Mr Grabiner argued that as Sir Philip was neither identified nor prejudiced by the decision notice against Shell, he was not protected by Section 393 (4) of the Act.

If Sir Philip wins the case, he will urge the FSA to withdraw its final notice against Shell from its website until investigations against individuals are complete, and for the regulator to admit it was wrong not to serve him with a separate decision notice.

The two-man tribunal will deliberate on its verdict, before delivering a judgment within the next few weeks. 

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