Shell Settles Oil Reserve Fraud Case for $150.7 Million
LONDON -- Royal Dutch/Shell Group agreed on Tuesday to finalized settlements with U.S. and U.K. regulators, which will cost the oil giant $150.7 million over its mis-statement of proven oil reserves, reported Reuters.
The world's third-largest oil company will pay 17 million pounds ($30.7 million) to the U.K. Financial Services Authority and $120 million to the U.S. Securities and Exchange Commission.
The settlement comes after Shell stunned financial markets in January by slashing its proven oil and gas reserves by a fifth, or 4.47 billion barrels.
The FSA said Shell's "unprecedented misconduct" resulted in market abuse and the breaching of listing rules. The SEC said Shell consented to a cease-and-desist order finding violations of the anti-fraud and other provisions of U.S. federal securities laws.
Shell said it will also spend an additional $5 million to develop and implement a "comprehensive internal compliance program'' as part of its deal with the SEC. It said it has improved its systems to prevent "any recurrence of these unfortunate events."
Several top Shell executives lost their jobs in the wake of the scandal. Shell's new board, led by chairman Jeroen van der Veer and managing director Malcolm Brinded, has slowly won over shareholders with promises to improve corporate governance.
Earlier this month, a senior industry source told Reuters that Shell would unify the boards of its Dutch and British holding companies. The group might even consider a full merger of the two, or for one holding company to take over the other.
The company currently has two boards. Royal Dutch owns 60 percent of the overall group, while Shell Transport & Trading holds the remaining 40 percent.
Shell has said it will publish the results of its corporate governance review in November, and that nothing had been ruled out.
The world's third-largest oil company will pay 17 million pounds ($30.7 million) to the U.K. Financial Services Authority and $120 million to the U.S. Securities and Exchange Commission.
The settlement comes after Shell stunned financial markets in January by slashing its proven oil and gas reserves by a fifth, or 4.47 billion barrels.
The FSA said Shell's "unprecedented misconduct" resulted in market abuse and the breaching of listing rules. The SEC said Shell consented to a cease-and-desist order finding violations of the anti-fraud and other provisions of U.S. federal securities laws.
Shell said it will also spend an additional $5 million to develop and implement a "comprehensive internal compliance program'' as part of its deal with the SEC. It said it has improved its systems to prevent "any recurrence of these unfortunate events."
Several top Shell executives lost their jobs in the wake of the scandal. Shell's new board, led by chairman Jeroen van der Veer and managing director Malcolm Brinded, has slowly won over shareholders with promises to improve corporate governance.
Earlier this month, a senior industry source told Reuters that Shell would unify the boards of its Dutch and British holding companies. The group might even consider a full merger of the two, or for one holding company to take over the other.
The company currently has two boards. Royal Dutch owns 60 percent of the overall group, while Shell Transport & Trading holds the remaining 40 percent.
Shell has said it will publish the results of its corporate governance review in November, and that nothing had been ruled out.