The Guardian: More heads may roll

Terry Macalister

Friday March 19, 2004

The mounting level of crisis surrounding the world's second largest quoted oil company has raised expectations that further heads will roll at Shell.

A chairman and exploration director have so far been shown the door but many shareholders are questioning why other top executives, such as finance director Judy Boynton, remain. New chairman Jeroen van der Veer was under pressure to explain at a hastily convened press and analyst briefing yesterday what he knew about the reserves fiasco.

He insisted he was unaware of the scale of the problems two years ago, as some reports have claimed, but admitted he did know of potential problems with Shell's filings with America's securities and exchange commission.

And a formal statement from the group suggested that Shell had not ruled out others following former chairman Sir Philip Watts and Walter van de Vijver out of the door. An internal investigation is still going on,which will not report until the beginning of next month.

The political mood in America means that the regulators are likely to be very tough with Shell over the downgrades and could punish executives.

Robust legal action by the financial authorities against the likes of media doyenne Martha Stewart has been seen as the consequence of US president George Bush wanting to show his independence from the wealth and privilege of the business world by ensuring executive crime is punished.

This could be rough for Sir Philip and Shell executives as reports circulate that the justice department is investigating the reserves fiasco.

The SEC, the Financial Services Authority in Britain and the Euronext exchange in Amsterdam are having a look at the issue while Shell admitted the Dutch regulatory authorities were carrying out an insider dealing inquiry, although the oil company claimed this was routine.

http://www.guardian.co.uk/oil/story/0,11319,1173140,00.html