By OGJ editors
HOUSTON, Apr. 11 -- Royal Dutch Shell PLC agreed to pay $352.6 million, plus administrative costs, to investors outside the US in a settlement related to a series of reserves writedowns. Shell admitted no wrongdoing in the settlement. Investors had said the oil and gas major was involved in improper accounting for oil and gas reserves during 1997-2003.
The company reclassified reserves five times in a little over a year (OGJ Online, Feb. 4, 2005).
In an Apr. 11 news release, Shell said it agreed to settle with a group of European and other investors outside the US. Parties to the settlement involve institutional investors including Dutch pension funds led by Stichting Pensioenfonds ABP. Others are organizations representing individual shareholders in The Netherlands and the Shell Reserves Compensation Foundation, a settlement foundation.
The agreement depends on the Amsterdam Court of Appeals declaring the settlement binding for all of the shareholders that it covers and is subject to agreed opt-out provisions. Regarding US investors, Shell intends to offer a same proportional settlement to them, pending approval from the US court overseeing the case. A legal director for Shell told reporters at a news conference in London that the firm plans to offer US investors an $80 million settlement.
In addition, Shell is asking the US Securities and Exchange Commission to distribute to shareholders the $120 million that Shell paid in 2004 under a consent agreement resolving the SEC's investigation into Shell's reserves recategorization.
Grant & Eisenhofer PA attorney Jay Eisenhofer said it was an unprecedented settlement of a large-scale European shareholder dispute. His law firm represented the investor group and the special purpose foundation. Grant & Eisenhofer is based in Wilmington, Del., and New York
"The scale of recovery and the sheer collective unity of the investor group are both unique in a European context," Eisenhofer said, noting that the shareholder class involved a broad swath of public pension funds.
