Shell directors under fire

2004-06-20 17:32

London - Leading shareholders of the Dutch arm of Royal Dutch/Shell Group are insisting that the oil giant's directors remain legally liable for the series of blunders which plunged the company into crisis earlier this year, the UK's Sunday Telegraph reported.

Citing two of the Anglo-Dutch company's leading institutional shareholders, including UK-based Isis Asset Management, the paper said shareholders may refuse to absolve the directors of their responsibilities for the past year at the company's forthcoming annual general meeting on June 28.

The paper said shareholders are keen to avoid taking any steps which may preclude them from subsequent legal action after Shell admitted it had overstated its oil and gas reserves.

The report came just a day after Dutch paper NRC Handelsblad quoted a former executive of one of the oil group's subsidiaries as saying half of the company's 400 most senior managers were aware of the problem.

In a letter sent to Shell's new chairperson Jeroen van der Veer in April, Hans Bouman, one of the directors of NAM, a joint venture between Shell and US oil group Exxon Mobil Corp, called on him to sack the managers who he said had done nothing to uncover the scandal in the hope the problem would eventually pass.

Meanwhile, the Sunday Telegraph said some shareholders have also written to the company asking it to minimise payoffs to former executives, including van der Veer's predecessor Sir Philip Watts who was sacked on March 3.

The paper said the company is close to finalising Watts' settlement which will be around £1m.

Shell on Thursday bowed to shareholder pressure and scrapped its much-criticised priority shares which carry extra voting rights controlled by management.

It also indicated it was mulling simplifying its complex dual board structure.

AFX