The Guardian (UK) Ousted Shell boss cleared over reserves scandal: “Sir Philip is still facing investigation by the securities and exchange commission, the US financial regulator, into his personal actions in relation to the downgrades, while one major class-action lawsuit against Shell is under way in America.”: Thursday 10 November 2005

TERRY MACALISTER

Sir Philip Watts, the ousted chairman of Shell, has been cleared of personal wrong-doing by the Financial Services Authority over last year's reserves scandal, which severely damaged the reputation of the oil group.

The City regulator said its inquiries into the roles of a number of Shell staff had been completed "and the FSA will be taking no further action." The decision was met with jubilation by Sir Philip - as well as by Shell, which was hit by FSA fines in August last year for committing market abuse and breaching the listing rules.

"Sir Philip is very pleased that he has been cleared after a long period of investigation. It is a vindication of his position that he acted properly and in good faith," said a statement released by his lawyers, Herbert Smith.

Shell was also happy to see the FSA ruling draw a line under the issue in Britain. "The company is very pleased that the FSA has concluded its investigations into the reserves issue and that no further action is to be taken," said the group in a separate statement released last night.

Sir Philip is still facing investigation by the securities and exchange commission, the US financial regulator, into his personal actions in relation to the downgrades, while one major class-action lawsuit against Shell is under way in America.

In September the former Shell boss lost a tribunal case against the FSA when he claimed the regulator had damaged his reputation by allowing him to be identified in the censure of the firm.

The FSA did not name Sir Philip but the former chairman argued that criticism of the firm was in effect an attack on his leadership. He claimed he should have been given prior sight of the FSA's final ruling before it was published: section 393 of the regulator's rules stipulates that anyone who is censured must be informed so they can give their side of the story. This did not happen because Sir Philip was not named. Yesterday the FSA statement again did not name him, talking only of "certain individuals".

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