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The Independent: Shell non-execs hire advisers as van de Vijver speaks out

 

By Katherine Griffiths and Danielle Rossingh

15 April 2004

 

Several of Shell's non-executives who sat on its audit committee have hired their own advisers before publication of a report into the string of mistakes made by the oil and gas giant.

 

The group has taken on the City public relations firm Brunswick to give advice on how to handle what could be a flood of fresh criticism of Shell's internal failings, which led it to massively overstate the amount of natural resources it thought it had in its reserves. The appointment of Brunswick is in addition to the continued advice given by Finsbury, the group's external financial public relations advisers.

 

Shell shook the financial markets around the world in January when it had to slash its proven reserves by 20 per cent and again cut its oil and gas reserve accounts last month.

 

Members of Shell's audit committee, which includes Sir Peter Burt, the recently appointed chairman of ITV, have hired Brunswick apparently at the company's expense just days before Shell is due to publish the details of its own internal probe.

 

The audit committee knows what is in the report because it commissioned it. But sources say they are worried they will be accused of producing a "whitewash". The report is thought to lay much of the blame for the crisis on Sir Philip Watts, who was forced to resign as chief executive of the company last month.

 

Walter Van de Vijver, the former head of exploration at Shell, who was also forced to step down, tried to defend his record yesterday. He issued a statement through his lawyers saying he had "regularly communicated" the state of the company's oil reserves to senior managers at Europe's second-biggest oil company.

 

Mr Van de Vijver's statement, released by the Washington DC law firm Akin Gump Strauss Hauer & Feld LLP, said: "I found that the company's procedures were in need of improvement and that some prior bookings needed to be re-evaluated for compliance purposes. I communicated my findings to the Committee of Managing Directors without delay."

 

Separately, Sir Philip is also understood to have hired the Washington firm Crowell & Moring, although he has not yet made a public statement about his own record at Shell. The company is already the subject of numerous legal actions which have been launched by lawyers acting for shareholders, and more lawsuits, either against Shell or against individuals involved with it.

 

Brunswick, which is headed by the veteran spin doctor Alan Parker, would not comment on its appointment by Shell, which is likely to pay for the advice to the non-executives out of shareholders' money.

 

Shell itself said it could not comment on why the firm had been hired in addition to Finsbury.Shell's audit committee includes British, Dutch and American non-executives. As well as Sir Peter, who used to be chief executive of NatWest, other members are Mary Henderson, a former executive of the US food giant Bestfoods, and Luis Giusti, a director of Shell from 2000 and former head of the Venezuelan oil company PDVSA.

 

Mr Van de Vijver's strongly worded statement, his first since leaving the company, went on to say he was asked to resign from Shell "without credible explanation", and that press reports, "including many attributed to the company or individuals 'close to' the internal investigations", had portrayed his role "inaccurately or incompletely".

 

A spokesman for Akin Gump Strauss Hauer & Feld LLP declined to comment further yesterday.

 

Royal Dutch/Shell non-executives in the spotlight

 

Sir Peter Burt

 

Sir Peter, 60, was appointed a director at Shell two years ago. The executive deputy chairman of HBOS, he was appointed as non-executive chairman of ITV in February. On the audit committee.

 

Henny de Ruiter

 

Appointed to the supervisory board of Royal Dutch in 1994 and due to retire this year. The 70-year-old Dutchman made headlines last year as chairman of the supervisory board of the Dutch retailer Ahold, which was rocked by a multimillion-euro accounting scandal under his watch. Sits on the group audit, remuneration and succession review committees.

 

Lawrence Ricciardi

 

A 63-year-old US citizen, he was appointed to the supervisory board of Royal Dutch in 2001 and is expected to retire in 2005. Previously he was president of the tobacco and food company RJR Nabisco and senior vice-president and general counsel to the computer giant IBM. Sits on the group audit committee.

 

Aad Jacobs

 

The 68-year-old Dutch national was appointed to Royal Dutch's supervisory board in 1998, and became chairman four years later. Mr Jacobs previously chaired the board of management of the Dutch bank ING Group, while he was also chairman of the supervisory boards of the IT company Imtech and the publisher VNU.

 

Luis Giusti

 

The 59-year old Venezuelan national and former head of the Venezuelan oil company PDVSA was appointed a director of Shell in 2000. Sits on the group audit committee.

 

Mary (Nina) Henderson

 

A former executive of the US food giant Bestfoods, the 53-year-old American was appointed a director of Shell in 2001. Sits on the group audit, remuneration and succession review committees.

 

http://news.independent.co.uk/business/news/story.jsp?story=511524


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