The Independent: Ex-Shell chairman loses case against watchdog: “Sir Philip, who was sacked in disgrace last year after the scandal broke…”: “Shell has agreed to foot the legal costs of former directors dismissed over the scandal and last year provided $12m in expenses.” Wednesday 14 Sept 2005
By Michael Harrison, Business Editor
Published: 14 September 2005
The former Shell chairman Sir Philip Watts suffered a blow to his attempts to clear his name yesterday after a tribunal ruled that the Financial Services Authority had not prejudiced him in a damning report into the oil giant's misreporting of reserves.
Sir Philip, who was sacked in disgrace last year after the scandal broke, had argued that the FSA was under a duty to show him a copy of its report in advance and give him a chance to respond before publication.
His counsel also argued that the damage to Sir Philip's reputation had been magnified by the fact that he was under investigation by the FSA when the report was published last August and remains so today.
The FSA responded that because Sir Philip was not referred to by name in its notice, it was under no such obligation to give him a right of reply. The Financial Services and Markets Tribunal ruled in the FSA's favour, saying it found that Sir Philip "was not identified and prejudiced" by the FSA's notice.
The FSA imposed a fine of £17m on Shell, the largest in its history, for incorrectly booking 4.3 billion barrels of oil reserves as proven when they were not. The US Securities and Exchange Commission imposed an even bigger civil penalty of $120m (£66m).
The FSA said it welcomed the clarification of the law in relation to the rights of third parties but declined to comment further. Jeremy Sandelson, the head of the litigation practice at the law firm Clifford Chance, described the tribunal's ruling as "a great result for the FSA".
A statement issued by Sir Philip's legal advisers, Herbert Smith, said he was disappointed by the ruling and was giving it careful consideration. "He will continue to fight to clear his name and believes that he will be vindicated if any proceedings are instituted against him," it added.
Shell has agreed to foot the legal costs of former directors dismissed over the scandal and last year provided $12m in expenses.
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