The Independent: Jeremy Warner's Outlook: Who would have thought it? Sir Phil Watts escapes scot-free from Shell reserves fiasco: “Never mind that Sir Phil's own head of exploration and production said in a memo to Sir Phil shortly before the scandal exploded on an unsuspecting world that he was sick and tired about lying to the markets over the state of group reserves. Never mind too the damning findings of a Shell-commissioned investigation of the mischief. These are just minor nuisances which the FSA has, to everyone's relief, seen fit wholly to ignore.”: “The truth of the matter is that the FSA has made itself a laughing stock…”: Thursday 10 November 2005
Published: 10 November 2005
Phil Watts is innocent, OK. I'm glad to see that tireless campaigning on the former Shell chairman's behalf has finally succeeded in clearing him of all "charges" in connection with the mis-statement of Shell reserves. In a three liner yesterday, the Financial Services Authority said that enquiries into the role of certain individuals in the mis-statement of Shell's hydrocarbon reserves had reached a conclusion and that no further action is being taken. Hurrah!
To use the jargon, Sir Phil emerges without a stain on his character and quite right too after the nearly two years of abuse and vilification he's received over the affair.
Never mind that Sir Phil's own head of exploration and production said in a memo to Sir Phil shortly before the scandal exploded on an unsuspecting world that he was sick and tired about lying to the markets over the state of group reserves. Never mind too the damning findings of a Shell-commissioned investigation of the mischief. These are just minor nuisances which the FSA has, to everyone's relief, seen fit wholly to ignore.
OK, OK, so that's enough of the heavy irony; I've beaten the point to death. The truth of the matter is that the FSA has made itself a laughing stock by brutally pursuing two directors of a tiny software company through the courts for issuing false and misleading information - and securing custodial sentences against them - while failing to make even the civil offence of misleading the stock market stack up against Sir Phil in the most high profile case of its kind in years.
As it happens, the FSA's own enforcement people were all in favour of stringing Sir Phil up from the nearest tree too. It was the Regulatory Decisions Committee, made up of a motley crew of former bankers, PR men, lawyers, actuaries, stock brokers and policemen, that vetoed taking any further action.
All the same, to the outside world the decision, which carries no explanation or elaboration, looks incomprehensible. On the available evidence, a clearer case of knowingly issuing a false prospectus is hard to imagine. Yet the FSA has ducked it.
Meanwhile, the two AIT directors languish in a prison cell for what to most would seem the far less heinous crime of allowing an overly optimistic trading update to be released to the stock market. By comparison with Shell, it was a tin pot little case of hardly any significance at all. Certainly the scale of the losses suffered by investors bare no comparison.
No doubt there is some compelling legal reason for letting Sir Phil off the hook. If in the end there is no case to answer, there's no case to answer. Yet to the outside world it looks like double standards: one rule for the little guy, pour encourager les autres, and another entirely for the higher, more powerful, echelons of British industry.
Click here to return to ShellNews.net HOME PAGE