UK headquartered oil and gas producer Shell is to pay out $9.2 million and has agreed to make changes to its corporate governance in order to settle four lawsuits brought against it by disgruntled shareholders. However, the agreement is likely to be just the start of a new round of reserve scandal induced headaches for the company.
Shareholders had taken legal action against the energy company over the damage that had been done to share values by the 2004 natural resources reserves scandal. In January 2004 Shell issued a statement admitting that it had over-estimated its reserves of oil and gas in its official filings with the US Securities and Exchange Commission.
The $9 million agreement and commitment to corporate changes will settle a case currently pending in New York and New Jersey courts.
According to a statement released by Shell, the corporate adjustments will address …policies and standards in the areas of board composition and qualifications, membership and functions of board committees, and director and senior management compensation.
However, the company is not yet out of the woods, as a second class action from an even larger group of shareholders and investigations by Dutch and Californian officials could cost the company even more. Shell has already paid out around $150 million in fines both in the US and UK.