Companies
Shell pays out over reserves debacle
Royal Dutch Shell is to pay non-US investors
in excess of $350m in
compensation over its reserves scandal, which saw the oil giant accused of
falsifying the amount of proven oil and gas discoveries on its books. The
settlement does not, however, extend to shareholders in the US, where a class
action lawsuit is being brought against Shell.
Shell, “without admitting any wrongdoing”, will pay over
$340m to non-US investors who purchased shares from 8 April 1999 until 18 March
2004, $12.5m to all non-US shareholders who submit a valid claim for relief, and
$6.25 to shareholder groups to assist individual investors in preparing claims.
Among these shareholder groups is the
Dutch Investors’
Association (VEB), which welcomed the settlement on the grounds that it will not
only benefit investors who suffered losses over the reserves scandal, but also,
by allowing Shell to put this issue behind it – at least in Europe – current
shareholders as well.
The Financial Times' Lombard (12 April) argued it is hard to see who wins
from this settlement other than the lawyers, with the payment simply being a
transfer of value from Shell’s current to its previous shareholders, many of
which overlap.
However, Lombard added, by participating in the settlement
Shell’s European shareholders have protected their investment by preventing
themselves from effectively cross-subsidising any settlement for US investors,
who represented only 20% of the company’s register.
Links
Royal Dutch Shell
Dutch Investors’
Association
Financial Times
May 2007
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