The Sunday Telegraph: Shell investors demand Royal Dutch meeting
By Sylvia Pfeifer (Filed: 28/03/2004)
Investors in Shell will turn up the heat on the beleaguered oil giant in the coming days by demanding a meeting with representatives from the Royal Dutch board.
Institutional investors from the UK, the US, Holland and Germany are understood to be drawing up a letter requesting to meet Aad Jacobs, the chairman of Royal Dutch and the head of its audit committee.
"A number of institutions want to set up a meeting with Royal Dutch. A letter is being drawn up," said one leading investor. "There is a view that both companies should receive the same messages and that both sides should feel the heat."
New York investment fund Knight Vinke Institutional Partners, which is backed by Calpers, the world's largest institutional investor, is expected to join the calls. Eric Knight, who heads the fund, said: "We are thinking of asking for a meeting with the Dutch board."
Investors are concerned that the Dutch board, one part of Shell's complex dual corporate structure, has failed so far to respond effectively to their demands after Shell's shock announcement in January that it overbooked its proven reserves by 25 per cent.
Many investors believe a more concerted effort is needed by the Dutch board to engage shareholders. In contrast, the non-executive directors of Shell Transport & Trading, the UK-listed company, held a crucial meeting with major investors in London last Monday.
Investors' concerns stem from the fact that the Royal Dutch side owns 60 per cent of the group, making it unlikely any changes will take place without its directors' consent.
It has also emerged that the company is considering adopting a similar structure to BHP Billiton, the mining giant. This would involve having two operating companies run by a unified management team.
Meanwhile, investors have been told that Shell has not yet appointed headhunters to look for a new external chairman to replace Lord Oxburgh, who was appointed interim UK chairman earlier this month. The delay is because discussions about the group's structure have made the exact position of a replacement for Oxburgh unclear.