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The Press & Journal (Aberdeen): CHAOS AFTER SYSTEM CRASHES (*more consequences of fraud at Shell)

08:50 – 04 September 2006
Filling stations were thrown into chaos at the weekend after the chip and pin debit and credit card payment system at petrol giant Shell crashed.

Filling stations across Scotland put up “cash only” signs to alert hundreds of drivers who rolled up to the pumps to refuel. Garages which had cash machines on site ran out of money forcing motorists to continue to other stations.

It is believed the whole country may have been affected by the fault, but a spokesman for Shell yesterday said he was unable to say how many stations were involved.

The company has newly reintroduced the chip and pin system at garages throughout the UK after a massive fraud led to a four-month suspension of the service at 600 of its company-owned petrol stations.

A spokesman for Shell declined to comment.

Posted on the article in reponse to report:

By John Donovan

As a long term Shell shareholder, I can tell your readers that Shell is no stranger to fraud. This time it may have been guilty only of having a flawed payment system susceptible to fraud (that still suggests negligence by Shell management).

However the current scam is small beer compared with the recent activities of Shell directors. I refer to the 2004 oil and gas reserves fraud described as the biggest corporate fraud in history. Basically a third of Shell’s claimed oil and gas reserves turned out to be conjured up out of thin air.

The costs to Shell shareholders arising from the fraud have been astronomical: Shell recently set aside $500 MILLION to settle a consolidated U.S. class action alleging fraud. It has already paid $150 million in penalties imposed by the U.S. Securities and Exchange Commission (for securities fraud) and the UK Financial Services Authority (for fooling the market). Shell has also already agreed to settle for multimillion dollar sums other class action lawsuits, including one brought by its own employees in respect of the fraud and its impact on a Shell employee pension fund.

Other actions are pending e.g.

SHELL’S FRAUDULENT SCHEME TO MANIPULATE RESERVES: This is not my description but a heading from another U.S. class action against Royal Dutch Shell Plc and named Defendants including current CEO, Jeroen van der Veer. The action was filed in the US District Court for the District of New Jersey on 6 January 2006 by US lawyers Grant & Eisenhofer acting for 26 Dutch pension funds led by ABP, Europe’s largest retirement fund.

The following are EXTRACTS from the Complaint: –

Entire Paragraph 10

Shell’s wholly fraudulent reserve reporting, in addition to causing substantial declines in its share price in the wake of the disclosures of this fraud, has caused the impairment of its corporate credit ratings, the restatement of its reported financial results, and the termination of Watts, van de Vijver and Boynton from their senior executive positions within the Companies.

Extracts from Paragraph 17.

In his message to shareholders, Lord Ron Oxburgh – who at the time was chairman of Shell Transport… “…apologized unreservedly” for the Companies’ “control weaknesses and inappropriate departure from [its] Business Principles,” and promised to rebuild Shell’s business and reputation based upon “the lessons learned” from the reclassification.

From Paragraph 73.

Defendant Jeroen van der Veer (“van der Veer”) is a citizen of The Netherlands. Van der Veer has served as President of Royal Dutch since 2000, and was promoted to Chairman of the CMD in March 2004. Van der Veer joined Shell in 1971, and held a number of senior management positions around the world. Van der Veer served as the Vice-Chairman of the CMD during 1997-2003 and, as such, personally participated in the misconduct alleged herein. Van der Veer signed the false and misleading annual reports on Form 20-F for the years 2000 through 2002, and falsely certified the 2002 Form 20-F under the Sarbanes-Oxley Act. Van der Veer also reviewed and authorized the filing of the 1998 and 1999 annual reports on Form 20-F. Van der Veer knew these reports to be materially false and/or recklessly and/or negligently disregarded their truth or falsity, and thus was an active and knowing participant in the wrongdoing.

Entire Paragraph 114.

Faced with the inability to actually find the new gas and oil it needed to shore up its reserves and thereby to ensure its ongoing profitability, Shell turned to the accounting fraud discussed herein to bolster the Companies’ fading credibility with the investing public.

The ramifications of the reserves scandal are likely to drag on for years after the Chip and Pin fraud has been forgotten.

On the same subject of Shell fraud, I note that Shell has not issued libel proceedings against the former Shell International Group Auditor, Mr Bill Campbell, concerning alleged falsification of records in relation to the Shell Brent tragedy.

This was not a case of some outsider ignorant of the facts making wild accusations. The charges have been made by a person of high reputation and considerable expertise following his authorised investigation as Group Auditor into the Shell Brent safety regime.

Since a number of “accidental” deaths have occurred on Brent Bravo, two of which resulted in a record breaking £900,000 fine imposed on Shell, the allegation of falsification of records could result in criminal charges if true.

Mr Campbell is on record as claiming that he has personally met with the Chief Executive of Royal Dutch Shell, Mr Jeroen van der Veer, to discuss these matters. If this is correct, then Mr Van der Veer must be fully briefed on the issues and the allegations he has publicly made. They have been repeated in various mass media sources and in trade publications including, for example, UpstreamOnline.

Mr Campbell says that ESDV leak-off tests were purposely falsified, not once but many times. He further alleges that the inaction of the relevant Asset Manager, the General Manager, the Oil Director and the Shell Expro Managing Director in 1999 (Malcolm Brinded), contributed in some part to the alleged unlawful killing of two persons on Brent Bravo in September 2003.

Surely Shell is not going to allow Mr Campbell to continued repeating these devastating allegations? If they are unfounded, why has Shell not already instituted libel proceedings? If they are true, why has Mr Malcolm Brinded not been sacked? Why has he not done the honourable thing and resigned?

The fact that Shell has not obtained an injunction to prevent Mr Campbell making his allegations speaks volumes. One has to conclude that he is plainly a man of great courage who is speaking the truth. Nothing else can explain Shell’s lack of legal action against him.

Comment by John Donovan who operates the website recommended by Fortune magazine for information relating to Royal Dutch Shell Plc:

The above comments were only briefly posted on the website for The Press & Journal before being deleted (censored) without explanation.

*Comment in brackets added by and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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