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Shell
Announces Compensation to Shareholders for Overstatement of Reserves.
Shell has announced a compensation settlement for European investors who
purchased shares in Royal Dutch Shell or Shell Transport & Trading between
1999 and 2004. The settlement has been negotiated and agreed with VEB, the
Dutch Shareholders Association, but is also supported by the UK Shareholders
Association and other European shareholder associations. It is also subject
to court approval in Holland, and individual shareholders may choose to opt
out of the provisions.
Details
of the settlement are:
Without admitting any wrongdoing, Shell has
agreed to pay $ 352.6 million, plus administrative costs, to investors
covered by the settlement. Under the agreement, Shell's payment will
include:
* $340.1 million to be distributed to investors who both resided and
purchased shares outside the US from April 8, 1999 until
March 18, 2004,
with the oversight of the Foundation;
* $12.5 million to be divided equally among all shareholders who submit a
valid claim for relief, and
* $6.25 million to VEB and other similar organizations to assist
individual
shareholders in preparing and submitting claims.
Finally, Shell agreed as part of this settlement to request that the United
States Securities and Exchange Commission distribute to shareholders the
$120
million paid by Shell in 2004 under a consent agreement resolving the SEC's
investigation into Shell's reserves recategorisation.
The
"Foundation" referred to is the Shell Reserves Compensation Foundation which
has been set up to administer the distribution of the compensation.
Note
that the market seemed to react favourably to the news and Shell's shares
rose in price on the morning of the announcement so clearly the market does
not view the impact on existing shareholders as significant. More
information on how the compensation will be distributed will follow in due
course.
If you
have any questions on the above, please contact UKSA Director Martin Morton.
The
following update was issued by VEB in April 2008:
Shell_Memorandum_Euroshareholders
In
May 2008 more information on the settlement became available on the
following web site:
www.royaldutchshellsettlement.com
In August
2008, the following information was issued by VEB:
Last week
it was announced that Shell shareholders who have suffered financial damages
can share an additional USD 120 million that Shell was obliged to pay the
Securities and Exchange Commission (‘SEC’) in 2004 by way of penalty for the
reserves scandals. Shell shareholders may submit claims at
http://www.shellvergoeding.nl/shell/ennews.php?newsnr=4922
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