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Shell under investigation by FSA

Date Class
23rd Apr 2004 Fraud Investigation
Investigations are being carried out by the Financial Services Authority into oil giant Shell after recent events.
A storm of bad publicity surrounds the company following three separate occasions when the company admitted it had overstated its oil reserves.

The Shell scandal first broke back in January when the firm made its initial announcement on a reserves downgrade.

Shell executives knowingly hid the company's oil and gas shortfalls as far back as 2001, said a Shell report.

The internal, but independent report firmly placed the blame on the shoulders of former chairman Sir Philip Watts and oil and gas chief Walter van de Vijver, who both resigned in March over 20% reserves' downgrades.

A month later Judy Boynton, Shell's finance chief, became the third casualty of the company's reserves crisis.

Following the downgrades, Shell's reserves for 2002 are now 4.35 billion barrels lower than previously thought.

There is also a further reduction of 500 million barrels for last year.

The impact on earnings from these changes averages $100m (56.4 million) for each year since 2000.

The FSA said Shell had been notified of the investigation and that no further statements would be made until the work reached a conclusion.

"We are continuing to co-operate with the FSA to assist them in concluding their inquiry expeditiously," a Shell spokesman said.

Shell is already under investigation in the US by both the Securities & Exchange Commission and the Justice Department.




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