Fined millions, makes billions
29 Jul 2004
Shell has agreed to pay fines worth over $150 million after brokering a deal with the UK's Financial Services Authority (FSA) and the staff of the US Securities and Exchange Commission (SEC) to resolve inquiries into the company's past 'overstatement' of its energy reserves.
Shell will pay a penalty of £17 million to the UK based FSA and an even heavier fine of $120 million to the SEC.
The company, however, did not admit or deny doing anything wrong in connection with the results of the FSA inquiries into a breach of the 'market abuse provisions' of the UK's Financial Services and Markets Act 2000 and the Listing Rules made under it.
Nor did it admit or deny violating the antifraud, reporting, recordkeeping and internal control provisions of the US Federal securities laws and related SEC rules.
In addition to the fines, Shell has also agreed to spend an additional $5 million developing a comprehensive internal compliance program to ensure that it never faces such problems again.
In a separate statement, the company reported a net income of $4.0 billion for the second quarter this year, an increase of 54% on the same period last year.
For the first six months of 2004, net income increased 7% compared to the same period last year.
