Daily Telegraph: Tax bill rebels furious over Shell
'£2bn saving': "Shell's controversial merger to create a
single corporate entity called Royal Dutch Shell is
understood to have saved the oil giant as much as
£2billion while leaving some of its British investors
with a £77m tax headache.": Friday 9 September 2005
By Christopher Hope, Business
Shell's controversial merger to
create a single corporate entity called Royal Dutch
Shell is understood to have saved the oil giant as much
as £2billion while leaving some of its British investors
with a £77m tax headache.
The news was greeted with anger by
rebel British holders in Royal Dutch Petroleum, who
are refusing to accept the terms of the merger with
Shell Transport and Trading in protest.
|Jeroen van der
The Association of Private Client
Investment Managers (Apcims), which has been campaigning
on behalf of the British investors, said: "We have had
more than one report that advisers said the construction
saved the company more than £1billion."
Julian Mathias, a private investor
controlling a £70,000 holding in Royal Dutch, said he
asked an adviser from Slaughter & May at the company's
annual meeting in late June why British holders in Royal
Dutch were being left with a large capital gains tax
Mr Mathias said: "The lawyer said it
was on the grounds of cost that they did not have a tax
efficient solution for UK holders of Royal Dutch. When I
asked how much are we talking about, he said
Angela Knight, Apcims' chief
executive, said some members believed Shell had saved
the money on its stamp duty bill from the transaction.
"Shell has saved money so it has a responsibility to
help right the wrong of leaving individual holders with
a large tax bill," she said.
Brokers with clients who are holding
out agreed. David Hunter, director of Smith &
Williamson, said: "The fact that there was a saving of
over £1billion shows that Shell thought it was something
worth saving. They knew that the British holders were
going to be screwed.
"The problem is that their duty is
to act for the greater good of the company and if some
of the shareholders get crushed then that is life. The
next step for the refuseniks is to sit tight and wait to
see what happens. There is no reason why they cannot
offer a standard share swap."
Charlotte Black, director at Brewin
Dolphin, added: "That [£1billion] is a considerable
amount. From the company's point of view the saving is
good news for them. But we would have thought that on
the strength of that Shell might find some sort of
solution." Around 1.3pc of the holders in Royal Dutch
have failed to accept the terms of the merger. Shell's
directors will consider what offer, including a cash
squeeze out or a share swap, to put to the refuseniks at
this month's board meeting.
Apcims has told Shell, whose chief
executive is Jeroen van der Veer, that it believes a
precedent was set when Britain's Reckitt & Colman bought
Holland's Benckiser five years ago. Reckitt made an
offer for Benckiser which was not acceptable for some of
the Benckiser shareholders.
Once the original offer was timed
out, a further two options were presented to
shareholders which had not accepted: a cash offer
through a squeeze out, and a share exchange. "We fail to
see why Shell cannot adopt a similar procedure," Ms
Shell said: "We never comment on
rumour and speculation. As we've consistently said, this
transaction is broadly tax neutral for the group and
does include the payment of stamp duty. We never comment
on the details of the amount of tax paid."