Daily Telegraph: Former Shell chief loses appeal over
have further inquiries which we are pursuing in relation
to Sir Philip. These have not yet been concluded.":
Wednesday 14 Sept 2005
By James Moore,
Financial Correspondent (Filed:
Former Shell chairman Sir Philip Watts
lost his appeal against the chief financial
regulator's handling of an investigation into the oil
giant's reserves scandal.
|Sir Philip is
‘disappointed by the tribunal's decision’
Sir Philip had
accused the Financial Services Authority of
"violating" his rights and running a "flawed
investigation" into Shell, which admitted it had
overstated its proven oil reserves by more than 4billion
He claimed that the regulator's Final
Notice of its decision to fine Shell £17m identified and
prejudiced him, despite not being named. Sir Philip
argued he should have been allowed to see and respond to
However, the independent Financial
Services & Markets Tribunal rejected the appeal saying:
"There is no reason in our view why a market abuse
allegation directed at a company must necessarily be
taken to impute criticism to particular individuals."
Lawyers said the decision would come as
a major relief to a regulator smarting from an earlier
tribunal's decision to halve a fine against life insurer
Legal & General for endowment mis-selling. The FSA was
sharply criticised in that tribunal's judgment.
In a statement, the regulator said:
"The FSA welcomes the clarification of the law in
relation to the rights of third parties. We have further
inquiries which we are pursuing in relation to Sir
Philip. These have not yet been concluded."
However, Sir Philip's law firm Herbert
Smith said in a statement: "Sir Philip is disappointed
by the tribunal's decision and we are giving careful
consideration to the tribunal's reasoning.
"The tribunal found that Sir Philip was
not technically 'identified' in the FSA's final notice.
Unfortunately the FSA did not make its position with
respect to Sir Philip and other individuals clear to the
media at the time the notice was publicised.
Consequently Sir Philip was compelled to bring this
"Sir Philip continues to believe that
the FSA's factual findings in the final notice against
Shell are flawed. Sir Philip acted properly and in good
faith at all times. He will continue his fight to clear
his name and believes that he will be vindicated if any
proceedings are instituted against him."
One option under consideration is an
appeal to the Court of Appeal on points of law, although
sources close to Sir Philip's legal team stressed that
no decisions had been made.
Jeremy Sandelson, head of litigation at
Clifford Chance, said: "The FSA must be very pleased. It
would have been embarrassing for them for the tribunal
to have found that they prejudiced Sir Philip in this
way. What the tribunal has done is to confirm that if
you are an individual you are not explicitly identified
even though the company you work for is criticised."
The FSA's decision to fine Shell was
released on the same day that America's Securities &
Exchange Commission imposed a $120m penalty on the
company, which was forced into a radical overhaul of its
corporate structure and management team in the wake of
Section 393 of the Financial Services &
Markets Act gives people named in regulatory actions the
right to view evidence relating to them and make
Sir Philip's lawyers said they had
tried to contact the FSA over this three times before
the release of the regulator's final notice.