(Nederlandse versie)
Royal Dutch Shell plc ("Shell") announced today that a settlement not extending to the United States has been reached covering the problems surrounding the 2004 adjustment of the company’s proven oil reserves. Without making any admission of fault, Shell has agreed to make a payment of $340.1 million to those investors covered by the settlement. These are European and other non-US investors in Shell. Those playing a part in reaching this settlement agreement included a number of institutional investors, the Vereniging van Effectenbezitters (Dutch Investors’ Association or VEB) and the Stichting Shell Reserves Compensation Foundation, a non-profit specially set up to process this settlement and to uphold the interests of those investors affected by this settlement.
These parties will lodge an application with the Amsterdam Court of Appeals under the Dutch Class Damages [Procedures] Act requesting that the settlement, together with the compensation destined for past and present shareholders, be declared binding upon all parties. These proceedings provide for an opt-out option for past and present shareholders who, though affected by this settlement, do not concur with it. Providing the US courts grant consent, Shell is proposing to offer US investors an identical settlement and compensation scheme. The main lines of this settlement are the following:
• Shell will pay $340.1 million to those investors not domiciled in the United States having made purchases outside the US during the 8 April 1999 - 18 March 2004 period. The amount allocated will be proportionate to the number of shares.
• Shell will also make available an additional $12.5 million to encourage private investors to participate in the settlement and the compensation scheme. This amount will be allocated equally amongst those investors with a claim and making an application. Current estimates suggest that this will come to a fixed distribution of about $130 (€100) for every investor taking part.
• The institutions affected and the VEB will drop all current and future legal proceedings against Shell related to the reserves issue.
• Shell will lodge an application with the SEC requesting that the $120 million penalty Shell paid in 2004 be distributed to investors under the compensation scheme. If the SEC accepts Shell’s proposal, some 80% of this sum will go to investors outside the US.
The VEB has played an active part in the discussions about the reserves. There were intensive exchanges with Shell throughout 2004 about the reasons leading up to the recategorisation. At the 2004 and 2005 shareholder meetings the VEB questioned its financial consequences and stated that it was desirable for any settlement scheme to treat European – including, of course, Dutch – investors on a par with their US counterparts. On 24 July 2006 the VEB issued a moratorium letter in order to safeguard the VEB’s interests as well as those of the shareholders the VEB represented. The VEB’s reaction was positive when it received an invitation to participate in talks with Shell and institutional investors designed to explore settlement options.
The VEB draws satisfaction from the settlement that has been reached: it serves the interest of Shell investors. On the hand the settlement provides for compensating investors who made losses as a result of the reserve issue. But it also benefits those holding shares in Shell today: this settlement makes it possible for Shell to put this issue – at least for investors outside the US - behind it and to focus on improving its operational performance. The VEB hopes that US investors can be compensated in the same way. Referring to the class action that has been commenced in the US, the VEB notes that the reserve recategorisation took place outside the US and that US investors hold only a relatively small proportion of Shell shares. The VEB has also secured an additional $12.5 million in compensation to be used in order to encourage private investors to register and take part. Estimating 90,000 as the figure for these investors, this would generate a flat payment of some $135 (about €100) to each shareholder taking part, regardless of the number of shares purchased.
The VEB will also devote major efforts to communicating this settlement. This has led to setting up a new website, www.shellcompensation.com. This started running today and allows shareholders to register and provides updates on the settlement and its processing. The VEB has also drawn upon its international cooperative arrangements – called Euroshareholders – that brings together 29 shareholder associations in Europe. Both Euroshareholders and its member organisations will promote the settlement, providing logistical support (website, magazine, membership files, and network) to draw the attention of past and present Shell shareholders to the compensation scheme.
The support coming from institutional investors, coupled to that of the VEB and of Euroshareholders points to a wide consensus amongst private and institutional investors, whether in the Netherlands or elsewhere in Europe.