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AFX News: US SEC ends probe on former Shell chairman on reserves scandal

Wednesday, 30th August 2006 13:08

LONDON (AFX) – The US Securities and Exchange Commission has concluded its investigation on Philip Watts, former chairman of the Royal Dutch/Shell Group, regarding his role on the Anglo-Dutch oil major’s oil reserves crisis in 2004, according to Watt’s lawyers.

The SEC, which conducted a two-year joint investigation with the UK’s Financial Services Authority, has concluded that ‘no action should be taken’ against Watts, they said.

In reaction, Watts said: ‘I am extremely pleased that the US authorities have closed the investigation.’

‘As I have stated from the beginning, I have acted in good faith throughout and I had every reason to believe that all at Shell acted properly and in good faith when disclosing proved reserves,’ he added.

Watts, along with Walter van de Vijver, who was in charge of Shell’s key exploration and production business, were ousted by the board two years ago after the group shocked investors with an admission that it overbooked oil and gas reserves by over a fifth.

The crisis forced the union of the UK’s Shell Transport & Trading PLC and Netherland’s Royal Dutch Petroleum NV, creating what is now known as Royal Dutch Shell PLC.

The FSA fined Shell a record 17 mln stg but took no action on Watts and other former executives.

‘I said from the beginning that I acted in good faith throughout and am delighted with the decisions of both the FSA and SEC,’ said Watts.

‘As I have always said, Shell’s proved reserves accounting process involved professionals and experts in many countries who, acting in good faith, exercised their independent judgment in estimating and booking the reserves,’ he said.

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