London Evening Standard: Shell facing up to 15 fraud claims
By James Rossiter,
9 March 2004
EMBATTLED oil major Shell has been hit by at least 15 multi-billion-dollar claims of fraud, it has emerged. Previously it was thought the group was the target of only one.
US class-action specialist Milberg Weiss Bershad Hynes & Lerach has attracted attention as it was the first to launch a $5bn (£2.7bn) claim against Shell and nine present and former directors of the Anglo-Dutch company, including former chairman Sir Philip Watts, within days of Shell admitting in January it had overstated its oil reserves.
However, a dozen more class-action claims were filed against Shell on behalf of its shareholders in the American courts over the following weeks, all claiming that Shell defrauded investors.
Two claims were lodged within hours of Watts resigning last Wednesday, one from law firm Berger & Montague and the other from Vianale & Vianale. Lawyers acting for Shell investors believe their cases have been strengthened by reports this week that Watts and other senior executives were warned of possible overstatements of the company's reserves two years before he publicly disclosed them.
'A court will take a strong inference from his resignation that he knew or was reckless as to what went on,' said one legal source involved in the proceedings.
'The revelations that he admits knowledge is very powerful in the case against him and Shell as his knowledge will be imputed to Shell, given his position in the company.'