AccountancyAge.com: Shell to become one giant company: “The overhaul was forced on Shell by pressure from investors after the reserves scandal which broke in January. The merger will create a unified business with a stock market value of £105bn - making it the second-biggest company on the London market.” (ShellNews.net)
Posted 30 Oct 04
The oil giant Shell is to spend an estimated £27m merging its Dutch and British operations.
Details of the merger were unveiled yesterday, and have been worked on for six months by four big investment banks alongside Shell's team of lawyers, accountants and advisors.
Investors welcomed the long-awaited restructuring, which will see the new, unified company run from the Netherlands by a Dutch chairman and a Dutch chief executive.
The overhaul was forced on Shell by pressure from investors after the reserves scandal which broke in January.
The merger will create a unified business with a stock market value of £105bn - making it the second-biggest company on the London market.
RELATED Article: AccountancyAge.com: Shell fiasco haunts KPMG (ShellNews.net)
By David Rae [23-09-2004]
KPMG has been dragged back into the Shell oil reserves controversy after Sir Philip Watts, the company's former chairman, instructed his lawyers to challenge the Financial Services Authority's final notice against the oil giant.
Link: Ex-Shell chairman defends reserves decisions
In an application to the Financial Services and Markets Tribunal, Watt's lawyers Herbert Smith claimed that Sir Philip 'relied on the reviews given by Shell's experts in oil and gas reserves estimation, and Shell's external auditors, to ensure the accuracy of reserves information'.
While reserves do not appear on the financial statements of oil companies, and therefore remain unaudited, Herbert Smith said that statement of auditing standard 52 means auditors must 'determine that the methods for estimating proved oil and gas reserves comply with generally accepted accounting principles'.
Sir Philip's lawyers also raised concerns over why KPMG had supported the group reserves auditor's 'competence and independence', despite the FSA singling it out as 'ineffective'. Sir Philip is understood to be looking for amendments to be made to the FSA's Final Notice. KPMG declined to comment.
The FSA this week defended its procedures when looking at the Shell issue.
A spokesman said: 'We are quite conscious of, and fully understand, our responsibilities to the rights of third parties. We are confident that any tribunal will find we respected Sir Philip Watt's rights.'