Financial Times: FSA drops case over Shell reserves scandal: “The Financial Services Authority is to take no action against Sir Philip Watts, former chairman of Royal Dutch/Shell, over the oil company's reserves scandal.”: “Euronext Amsterdam and the California Department of Corporations still have cases outstanding against Shell because of the reserves misstatement. There was also a securities class action suit in the US, the company said.”: Thursday 10 November 2005
By Barney Jopson and Thomas Catan
The Financial Services Authority is to take no action against Sir Philip Watts, former chairman of Royal Dutch/Shell, over the oil company's reserves scandal. It said it had closed its inquiries into all other individuals.
The surprise move was welcomed by Sir Philip, who has said his reputation had been tarnished by the inquiries and related publicity. It was not clear last night whether he was still being investigated by the US Securities and Exchange Commission.
The closure of the FSA investigation came more than a year after it fined Royal Dutch/Shell £17m for overstating its oil and gas reserves between 1998 and 2003. The regulator said in a statement: "The FSA has been pursuing inquiries into the roles of certain individuals in the misstatement of Shell's hydrocarbon reserves. Those inquiries have reached a conclusion and the FSA will be taking no further action." It came after Sir Philip's lawyers clashed with the regulator's enforcement arm in front of the FSA's regulatory decisions committee, which decides whether allegations warrant action.
Sir Philip's lawyers, Herbert Smith, said: "This vindicates the position Sir Philip has maintained throughout: that he acted properly and in good faith at all times."
Lawyers for Walter van de Vijver, Shell's former head of exploration and production, said they were delighted that the FSA move had also confirmed his innocence. Last year the oil company accepted the FSA fine and a $125m penalty from the SEC without admitting wrongdoing.
Shell said yesterday: "The company is pleased the FSA has concluded all of its investigations into the reserves issue and that no further action is to be taken."
Euronext Amsterdam and the California Department of Corporations still have cases outstanding against Shell because of the reserves misstatement. There was also a securities class action suit in the US, the company said.
The scandal led to about a third of Shell's oil and gas reserves being wiped from its books and a boardroom purge in which Sir Philip and Mr van de Vijver were ousted.
The turmoil prompted Shell to overhaul its corporate governance structure. In July it unified its British and Dutch parent companies, listing the company in London and putting its headquarters in The Hague.
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