Print this article | Return to Article | Return to CFO.com
In 2004, Royal Dutch Shell admitted that it had overstated its oil reserves by about 20 percent, or the equivalent of 3.9 billion barrels.
Stephen Taub, CFO.com | US
April 11, 2007
Royal Dutch Shell has agreed to pay $352.6 million, plus administrative costs, to settle a lawsuit stemming from its 2004 restatement of reserves.
The oil giant stressed that the agreement, with non-U.S. investors who purchased Royal Dutch shares outside the United States, would be effective only if the Amsterdam Court of Appeals declares that the settlement is binding for all affected shareholders. Plaintiffs include 50 institutional investors in the Netherlands, the United Kingdom, Germany, Sweden, Luxembourg, Denmark, Norway, and France.
According to U.S. law firm Grant & Eisenhofer, which represented the plaintiffs, this is the first European class-action settlement of securities fraud claims.
The settlement includes an additional $96 million from a fine paid by Shell to the Securities and Exchange Commission, plus other costs, bringing the total settlement to roughly $450 million, according to Grant & Eisenhofer.
Shell also plans to offer $80 million to settle claims from certain U.S. investors, Reuters reported.
If the deals are approved, the amount paid by Shell in fines and compensation to investors would total nearly $700 million.
In 2004, Royal Dutch Shell admitted that it had overstated its oil reserves by about 20 percent, or the equivalent of 3.9 billion barrels. Several executives lost their jobs, including chief financial officer Judy Boynton.