ShellNews.net: ROYAL DUTCH SHELL ROBBERS AND RASCALS: Monday 12 Sept 2005 04:15 EDT
By Alfred Donovan
The press is having a field day in devising colourful headlines about the scandal ridden Royal Dutch Shell Group. An article in “The Sunday Times” yesterday had a story under the headline: “Shell move robs UK investors”. It reported on the horrendous tax implications for UK Royal Dutch shareholders resulting from the recent Royal Dutch/Shell unification and the dubious way in which Shell has dealt with the controversy thus far.
Yesterdays “Independent on Sunday” used the term “Clever Rascals” about Shell in a headline relating to the Sakhalin project in Russia and the potential ramifications in respect of the critically endangered western grey whale. For the record, the Encarta Online Dictionary definition of a “rascal” is: “dishonest person: somebody, especially a man, who is dishonest or otherwise unethical”.
There is of course nothing new about newspaper headlines slating Shell. The oil giant has been under fire from all quarters in relation to the reserves debacle and other scandals and controversies for some time, with numerous class action law suits being brought against Royal Dutch Shell companies and individual Shell directors by Shell shareholders, and even by Shell’s own employees in the USA and Malaysia.
However, Shell directors seem to be in a vastly superior position to mere shareholders (the owners of Royal Dutch Shell Plc) and ordinary Shell employees. In fact, Shell directors seem to be impervious to any form of redress irrespective of the seriousness of misdeeds by them in performance of their fiduciary duties. Director contracts give them immunity even to the extent that Shell shareholders have to foot the bill for lawyers fees run up in the course of defending fat cat crooks, such as Sir Phillip Watts, the disgraced former Group Chairman of the Royal Dutch Shell Group. Sir Phillip ended up with a $18 million USD pension pot AND with all his ongoing legal fees being paid by Shell shareholders. This was after he had LIED AND COVERED UP THE TRUTH ABOUT SHELL’S RESERVES, AND IN THE PROCESS, DESTROYED SHELL’S REPUTATION. He (and other Shell directors) signed Form 20F Declarations filed with the US Securities & Exchange Commission knowing that they contained materially false information.
Is it morally right that directors of public companies should be able to escape retribution and end up with massive pay off settlements (possibly to buy their silence) even if they have cheated, lied, and engaged in a corporate culture of deception and cover-up to keep shareholders in the dark, as Shell management has been doing consistently for over a decade to my personal knowledge?
Is it right that instead of being made examples of, Shell directors accused of serious charges including securities fraud, have been rewarded, in the case of Jeroen van der Veer, with elevation to the position of Chief Executive Officer of Royal Dutch Shell Plc. What kind of signal does that send? Shell shareholders are paying his legal fees for an on-going class action lawsuit in which he is a named Defendant along with his fellow Royal Dutch Shell Plc directors, Malcolm Brinded and Maarten van den Bergh.
Currently Shell directors cannot lose even if they act in blatant breach of financial regulations and in breach of Shell’s much vaunted ethical code – Shell’s Statement of General Business Principles. On the grounds of Shell striving to put the reserves scandal behind it ASAP, Shell contends that it is in the best interest of Shell and its shareholders to bailout and/or shield directors who have engaged in dishonest actions in breach of fiduciary duties. However, is that policy also in the best interest of corporate transparency and director accountability? As matters stand, corporate crooks are showered with money and insulated from any penalty or court room justice by shareholder funds, used like confetti, on their behalf.
Is this unbelievable situation really in the public interest and in the best interests of shareholders and employees generally? I believe that the answer is NO. It is morally unacceptable and encourages corporate corruption and malfeasance. It is wrong that wider shareholder interests can be treated with such utter contempt and neglect. The corporate playing field has been tilted much too far in favour of directors, as opposed to other stakeholders and the public at large.
The US Justice Department decided against pursuing a criminal investigation against Shell because it reasoned that it would not be in the best interest of Shell shareholders who have already had to fund some $150 million dollars in fines imposed by the US Securities & Exchange Commission and the UK Financial Services Authority after Shell “fooled the market” by engaging in “market abuse”. Again I do not believe that this decision has been in the best interest of shareholders generally.
(Bearing in mind the importance given to "transparency" in Shell's Statement of General Business Principles, I believe the time is right for Shell to put into the public domain, the full 400 plus pages of the Davis, Polk & Wardwell Report into the circumstances of the reserves scandal. Thus far, shareholders have only been allowed to see an "Executive Summary".)
I am amazed that parties interested in Shell and business ethics have not raised their voices about these outrageous decisions and policies which actually reward dishonest, incompetent behaviour by directors of multinational companies – masters of the universe who already often seem to believe that they are beyond the powers of retribution, and/or the law, apparently with some justification.
The controversies/litigation listed below (updated from an earlier version) have all arisen from the misjudgement/misdeeds of Shell management: -
For Shell senior management to reward itself, as it recently did, with the purchase of a fleet of luxury jets against the above backdrop of misjudgement and gross ineptitude is simply obscene and shows that it has learnt nothing from the series of dramatic revelations since January 2004 which have destroyed Shell’s reputation.
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