Sunday Herald (Scotland): Shell rallies to shake off its false reserves: “IT IS an ill wind that blows up nobody’s kilt, as Scandalmonger is fond of remarking, so at least some good has come out of the Shell reserves debacle.”: “But what will not be so welcome is the fact that the British arm of the company is to suffer by the headquarters moving to the Hague. And insult is added to this injury by the news that a further 6% downgrade to reserves is expected.” (ShellNews.net)
31 Oct 04
IT IS an ill wind that blows up nobody’s kilt, as Scandalmonger is fond of remarking, so at least some good has come out of the Shell reserves debacle. The company has moved to replace its century-old byzantine, double-headed structure with a single, modern corporate framework.
The group’s UK and Dutch arms are to be merged into one company under the control of one board and a single chief executive thus ending corporate governance worries over the giant energy group.
The moves are to happen through bringing the two stock-market quotes together and redistributing the shares proportionally which will save costs on a full blown merger, a fact that will be of some comfort to long-suffering Shell shareholders. But what will not be so welcome is the fact that the British arm of the company is to suffer by the headquarters moving to the Hague.
And insult is added to this injury by the news that a further 6% downgrade to reserves is expected. Its structure may have been cleaned up but its future still looks none too shiny compared to other companies in the sector.
There was also further bad news last week from the company founded by American lifestyle guru Martha Stewart, who is currently serving time.
Stewart’s Living Omnimedia posted a loss of $15 million in the third quarter compared with a deficit of $3.9m a year earlier. Sales fell 24% to $38.7m. The business has struggled for customers since Stewart was first quizzed over a questionable share sale and found to have been lying to investigators. The trouble surrounding the company is not liable to clear up anytime soon.
Nor is that surrounding oil services giant Halliburton, particularly following the news that the FBI is investigating the controversial award of a major contract in Iraq.
It emerged at the end of last week that the FBI has asked to speak to a US army official about the military’s award to the company of a key contract to restore Iraqi oil production.
Wendy Hall, a Halliburton spokeswoman, dismissed the allegation as election politics. “The old allegations have once again been recycled, this time one week before an election” she said. Famously, US Vice-President Dick Cheney was chief executive of Halliburton between 1995 and 2000.
Hall said that the company was continuing to co-operate with the various investigations going on into the oil giant’s conduct.
Questions over Halliburton deepened last weekend when Bunnatine Greenhouse, the Army Corps of Engineers chief contracting officer, went public over allegations that her agency unfairly awarded Halliburton subsidiary KBR no-bid contracts.
Greenhouse’s lawyer said that the FBI’s investigation “underscores the seriousness of the misconduct, and also demonstrates how courageous Ms Greenhouse was for stepping forward.”
If Cheney does continue as veep, Scandalmonger does not fancy swapping places with Greenhouse who would surely be subject to retaliatory action from the White House.
On the subject of retaliation, the bankers and auditors in the Parmalat case were last week counter-attacking in the big smelly cheese of European scandals.
Bank of America filed a claim on Friday for damages against some of the Italian dairy companies former senior executives. In a separate action, Grant Thornton sought to lift an injunction preventing Parmalat from being sued in a US court.
Bank of America is central to the questions over the scandal given that it was one of its branches that was supposed to have held an account in which €4 billion (£2.8bn) of company funds were supposed to have been held. In fact, the account did not exist. It was the discovery of this that led to the collapse.
With all this lot on the go Scandalmonger is clearly going to be busy for some time yet.