Daily Mail: Shell must be fully opened
21 April 2004
ONE should not be too easily lulled into the view that after the release of an abbreviated report into the reserve accounting scandal at Shell, all the troubles at Britain's second-most important oil company are over.
London-based brokers, including Deutsche Bank and Cazenove, have been quick to upgrade the company's shares following chairman Lord Oxburgh's display of openness.
But there are reasons for caution. Credit rating agency Standard & Poor's thought the disclosures sufficiently worrying that they have stripped the blue-chip firm of its top ranking AAA rating. It noted that it may yet downgrade again once it has seen the 'definitive results' from the Shell review and the 2003 accounts.
S&P is right in wanting to know the full implications of the cover-up and falsification of reserves over several years before giving the company the benefit of the doubt.
It is to be trusted that the British authorities will be just as rigorous in their approach.
If the Financial Services Authority is taking a serious interest in Shell, then it is certainly keeping its powder dry, citing only the listing rules which require full disclosure. The Serious Fraud Office has not yet shown any appetite for a raid on the Shell tower.
Instead, it is being left to the American regulators the Securities and Exchange Commission and the Justice Department to make all the running.
It is unfortunate enough that most of the disclosures of coverup and shady dealings have emerged not from Shell itself but from leaks in the US.
Yet Shell is an Anglo-Dutch company and most of its investors are in Europe. If there is a case to be made against former chairman Sir Philip Watts, the company or other officials, it should be made here.
Britain cannot on the one hand boast that Enron-style accounting practices could not happen in the UK and then cover its ears when a major corporation admits damaging mistakes.
Lord Oxburgh needs to explain more clearly why the full investigatory report has not been published.
Shareholders need to see the report and accounts - replete with qualifications and notes - as soon as possible and Britain's regulators need to demonstrate they are not spineless.