Royal Dutch/Shell Faces Wrath Of Investors

By Agence France-Presse The management of Royal Dutch/Shell Group faced a grilling from angry shareholders on June 28 over the oil giant's energy reserves scandal, but escaped a full-blown shareholder revolt. Executives defended themselves against allegations of a coverup and a lack of transparency at dual annual meetings in London and The Hague. Shell has cut its proven oil reserves four times, by a total of over 20%, since January, leading to the departure of several top brass, including Chairman Philip Watts. In the Hague almost 40% of shareholders at the Royal Dutch meeting voted against a routine resolution "discharging" its directors and supervisory board of responsibility for 2003, according to preliminary results, though not enough to block it. Shell also came under fire over the 1 million pound (US$1.8-million) severance payment it awarded to Watts, who was ousted after the board said it had lost confidence in him. Almost 10% of shareholders at the Shell meeting in London opposed the company's remuneration package, though with about 90% in favor the resolution went through. The management of Shell sought to defuse investor anger by offering their apologies to shareholders. Shell Chairman Ron Oxburgh offered a "sincere apology" for the reserves saga, which he said would never happen again. But he insisted there had been no coverup by the company and action had been taken as swiftly as possible. The Anglo-Dutch group also faces calls from some shareholders to speed up a review of its corporate governance and ownership structure, under which London-based Shell owns 40% of the group and Netherlands-domiciled Royal Dutch Petroleum Co. holds 60%. But Oxburgh rejected such demands. "We take this question of corporate reform very seriously indeed. It would not be in anyone's interest to rush. We have had innumerable suggestions. We shall come forward with our proposals, we will consult on those proposals, and ask for approval at next year's [annual general meeting]," he said. On Friday lawyers representing Shell shareholders filed a new lawsuit in the United States that names 27 directors and officers of Royal Dutch/Shell on behalf of two pension funds. It accuses each of the defendant executives of breach of duties to shareholders, abuse of control, mismanagement, fraud and unjust enrichment. Copyright Agence France-Presse, 2004

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