Fresh Barrage Aimed at Shell
Byline: RUTH SUNDERLAND
SHELL'S hopes of containing its oil reserves crisis are likely to be dealt a blow by the findings spelled out in a 200-page report by its audit committee.
The report will be considered by its full UK and Dutch boards this week.
Shell, which is under investigation by US regulators, shied away yesterday from an unequivocal commitment to publishing the document in full, saying only that it will 'make public its main conclusions'.
This is not good enough.
Investors, who have seen billions wiped off the value of their company as a result of the scandal, are paying for the report. They have a right to see its findings in full.
Leaks in the US of a draft version of the report suggest it will put the blame largely on former chief executive Sir Phil Watts and Walter van de Vijver, the former
head of exploration and production.
Both have already lost their jobs over the affair.
But awkwardly for Shell, the report is likely to depict a culture of concealment dating back to the early 1990s. The management at that time apparently thought Shell was not as gungho as its rivals in the way it accounted for reserves, and relaxed the internal rules accordingly.
This led to abuse by engineers and other managers, who were keen on presenting the best possible numbers to boost their own careers.
Internal audit systems were
seemingly not up to the job of keeping them in check. If the accounting issues at Shell are shown to date back a decade, it will be a bonanza for the law firms mounting a barrage of class action suits, giving them a much longer period to scour for pickings.
It may also prove uncomfortable for members of the Shell diaspora occupying august positions in corporate Britain, including Maarten van den Bergh, chairman of Lloyds TSB, Sir Mark Moody-Stuart, who chairs the Anglo American mining group and Paul Skinner, chairman of Rio Tinto. …