Financial Times: Audit chief at Shell backs top managers
By Clay Harris and Sundeep Tucker
Mar 11, 2004
Royal Dutch/Shell's senior management, led by Jeroen van der Veer, the group's new chairman, yesterday won the backing of Aad Jacobs, chairman of its audit committee.
Mr van der Veer replaced Sir Philip Watts last week after Mr Jacobs's committee delivered a preliminary report about the Anglo-Dutch group's decision in January to cut its claimed oil reserves by 3.9bn barrels, or 20 per cent.
Mr Jacobs said the committee "recommended to the boards and external auditors that they should feel confident in relying on the representations of the group's current senior management".
The former chairman of the Dutch banking and insurance group ING added: "The documents and information gathered in this review have been and are being provided to the [US Securities and Exchange Commission]. The review is still in progress."
Walter van de Vijver, head of exploration and production, was forced to resign along with Sir Philip. Mr van der Veer said there had been a "loss of confidence" in the two men.
Internal Shell memos have subsequently surfaced, indicating that other senior executives - including Mr van der Veer and Judy Boynton, chief financial officer - had been alerted to issues about the reserves in 2002.
A senior investment industry figure suggested yesterday that Shell had concluded its internal audit review and presented its findings to the board, contrary to the group's claims. "In that case, it must come clean with shareholders and reveal the findings and likely implications," he said.
Shell did not comment, apart to note Mr van der Veer's statement on Friday that the final report would come in "weeks, maybe some months".
A senior investor said: "I suspect Shell is being reticent for legal reasons. Every time it opens its mouth at the moment it seems to attract another class action law suit."
Another said: "Investors will have to be patient. It will be a hollow victory if we demand to beat up all the management and, as a result, our investments go down the pan."