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LONDON -- The management of Royal Dutch/Shell is bracing for a showdown with angry shareholders this week over the oil giant's energy reserves scandal, reported the Associated Press.
The Anglo-Dutch group is facing calls for changes to its governance and ownership structure, under which London-based Shell owns 40 percent and Netherlands-based Royal Dutch Petroleum holds 60 percent. The two firms are holding what promise to be stormy dual annual shareholder meetings in London today.
Two major investors have ratcheted up the pressure, calling for two investor representatives to sit on a committee reviewing Shell's governance and structure. "We will attend the meetings and intend to participate actively and constructively," California pension fund CalPERS and U.S. asset manager Knight Vinke wrote in a letter to the oil giant, according to London's Financial Times.
Shell faced more embarrassment on Friday, when lawyers for shareholders filed a new lawsuit naming 27 directors and officers of the group and its accounting and audit firms, PricewaterhouseCoopers International and KPMG International.
The suit accuses each of the defendant executives of breach of duties to shareholders, abuse of control, mismanagement, fraud and unjust enrichment. It charges the accounting firms, which had unlimited access to information, with professional negligence and accounting malpractice
"The officers and directors of these interconnected companies have hidden behind an opaque and complicated corporate structure to falsify proved oil and gas reserves for nearly 10 years to make the company seem more competitive and more profitable," said William Lerach, counsel for the shareholders.
Several key executives have been ousted from the group amid an ensuing investor backlash, including chairman Philip Watts.
Shell is trying to restore investor confidence after admitting that it had overstated its energy reserves for several years. The group has cut its proven reserves by 4.47 billion barrels, or more than 20 percent, since January.