Hoovers.com: Shareholder class action filed against The Royal Dutch/Shell Group, Royal Dutch Petroleum Co, and The Shell Transport and Trading Co, PLC by the law firm of Schiffrin & Barroway LLP.

February 4, 2004 5:46am

Asia Intelligence Wire

The law firm of Schiffrin & Barroway LLP announced that a notice is hereby given that a class action lawsuit was filed in the US district Court for the District of New Jersey on behalf of all purchasers who purchased the American Depository Receipts (ADRs) of Royal Dutch Petroleum Co (Royal Dutch) and/or The Shell Transport and Trading Co, PLC (Shell Transport) (collectively "Royal Dutch/Shell") between 3 Dec 1999 and 9 Jan 2004, inclusive (the Class Period). The complaint charges defendants Royal Dutch, Shell Transport, Shell Petroleum NV, the Shell Petroleum Ltd, Maarten van der Bergh, Judy Boynton, Malcolm Brinded, SL Miller, Harry JM Roels, Paul D Skinner, M Moody-Stuart, Jeroen van der Veer, and Philip R Watts with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b- 5 promulgated there under. Between 3 Dec 1999 and 9 Jan 2004, the defendants statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: that Royal Dutch/Shell overstated its proved oil and gas reserve figures by 20%; that Royal Dutch/Shell accomplished the overstatement by including in its proved oil and gas reserves figures, when its venture partners did not, estimates from the Gorgon Joint Venture in Australia and the Nigerian Projects in Africa when such projects did not meet industry and SEC standards for proved reverses; that the inclusion of Gorgon Joint Venture in Australia and the Nigerian Projects in Africa and other projects was accomplished through the booking of its proved oil and gas reversed figures on the basis of initial letters of intent rather than on the basis of when such projects had been contracted; and as a result, Royal Dutch/Shell's true market value was materially overstated at all relevant times. On 9 Jan 2004, Royal Dutch/Shell announced that, following internal reviews, some proved hydrocarbon reserves would be recategorized. The total non recurring recategorization, relative to the proved reserves as stated at 31 Dec 2002, represented 3.9 bn bbls of oil equivalent of proved reserves, or 20% of proved reserves at that date. Over 90% of the total change is a reduction in the proved undeveloped category and the balance is a reduction in the proved developed category. Additionally, the company stated that of the recategorization, two thirds (2.7 bn bbls) relates to crude oil and natural gas liquids, and one third (1.2 bn bbls of oil equivalent) to natural gas. Moreover, Royal Dutch/Shell indicated that the FAS69 standardized measure of discounted future cash flows associated with the proved reserves would be impacted. On news of this shares of Shell Transport fell 6.9%, or $3.12/share, on heavy volume to close at $41.69/share on 9 Jan 2004.

Copyright © 2004 Elsevier Engineering Information. Source: Financial Times Information Limited (Trade Mark) - Asia Intelligence Wire.