Shell settles lawsuit after reserves scandal

| July 12, 2005 | 0 Comments
Shell settles lawsuit after reserves scandal

Royal Dutch/Shell Group has agreed to settle a lawsuit filed by its U.S. employees after the company overstated its reserves of gas and oil by 41 percent.

The settlement will cost Royal Dutch/Shell around $90 million, less than two days’ profits for the company, which netted $18.5 billion last year.

The settlement brings to around $240 million the amount that the overstatement has cost the company all together in defending itself from lawsuits and criminal investigations.

If the settlement is approved by the federal court in New Jersey, where it was filed, it will pay the settlement plus at least $1 million in legal fees.

The company earlier agreed to pay $151 million in penalties to bring to a close regulatory inquiries in the US and the UK related to its overstatements.

The US attorney in New York has said that criminal charges will not be pursued against the company because it would not serve the public interest.

However, Royal Dutch/Shell still faces inquiries by the Euronext stock exchange and by Dutch financial markets regulator AFM as well as another class-action lawsuit brought by stockholders.

Shell is also negotiating settlement with current and former unnamed directors and officers, whom it is suing in connection with the overstatements.

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