Sunday Telegraph: Shell bosses 'must remain liable for recent blunders'
By Sylvia Pfeifer (Filed: 20/06/2004)
Leading shareholders in Royal Dutch, the Netherlands-based arm of Royal Dutch/Shell, are insisting that its directors remain legally liable for the series of blunders that have plunged the oil giant into crisis over the past year.
In an unusual move, shareholders say they will refuse to absolve directors of their responsibilities for the past year at the annual meeting on June 28. In accordance with Dutch law, shareholders will be asked to vote on a resolution to "discharge" the managing directors and members of the supervisory board of "responsibility" in respect of their management and supervision.
"It's very possible investors might feel concerned about providing a discharge for the management for 2003," said Richard Singleton, the director of corporate governance at Isis Asset Management. "Abstention is an option we are considering given the events of last year, while taking note of their recent actions [to clarify their intentions on corporate governance]." Another Royal Dutch shareholder said: "We may well vote against it."
Shareholders are concerned a vote in favour could limit any actions they may want to take against the directors after Shell's admission that it had overstated its oil and gas reserves. The debacle led to the departures of its three senior executives, including the chairman, Sir Philip Watts.
Shell is under investigation in the US, for allegedly misleading the stock market, by the Securities and Exchange Commission and the Department of Justice.
Under Dutch law, approval of the resolution would release its management - led by the Royal Dutch president, Jeroen van der Veer - from any liabilities for all actions during the year.
Shareholders may still retain their rights to file suits if they can prove that executives have committed a crime, withheld information or provided misleading information.
Some shareholders have also written to Shell asking it to minimise payoffs to former executives, notably Watts. Shell is close to finalising his payoff, which will be around £1m.