After a two-year investigation, the US Securities and Exchange Commission has announced it will not be taking any action against former Shell boss Sir Philip Watts. The ex-Shell Chairman was being investigated over the oil and gas reserves overbooking crisis that hit Shell in 2004, when Shell overstated its proven oil and gas reserves by 23 per cent or around 4.5 billion barrels. The scandal cost him his job and plunged the Shell Group into crisis.
SEC has also ended its inquiry into the roles of ex-finance director Judy Boynton and former exploration and production chief Walter van de Vijver. He was the author of a famous email complaining that he was “becoming sick and tired about lying about the extent of our reserves issues”.
Sir Philip was said to be very relieved. “I said from the beginning that I acted in good faith throughout and am delighted with the decisions of both the FSA [UK Financial Service Authority] and SEC.” He still faces lawsuits from aggrieved shareholders, which are pursuing class actions against the company and its former directors.
The dropping of the case comes despite both the SEC and Britain’s Financial Services Authority fining Shell. This has led some industry observers bemused. One leading oil analyst has told the Daily Telegraph: “It is puzzling how the company gets fined but nothing gets done against anybody.” Couldn’t agree more.
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