Employees v Royal Dutch/Shell Group
Shell Will Pay $90 Million to Settle Class Action Lawsuit
Royal Dutch/Shell Group, the world's third largest oil group, agreed to pay about $90 million to settle a lawsuit brought by its U.S. employees after the company overstated its oil and gas reserves by 41 percent.
The accord brings to about $240 million costs related to the overstatement, which led to lawsuits, criminal investigations and the oust of Chief Executive Philip Watts. Insurance will cover $25 million of the settlement, Shell said in a statement July 12, 2005.
The complaint was brought by employees enrolled in savings plans covered by the Employee Retirement Income Security Act, or Erisa.
Shell shocked investors in January 2004 by slashing its proven reserves of oil and gas. The revelation that the firm had been exaggerating the size of its reserves for years sent its stock tumbling and led to the oust of its top executives.
Shell has already paid about $150 million in fines to U.S. and UK financial regulators over the scandal. The $90 million settlement represents less than two days' profit for Royal Dutch/Shell Group, which had record net income of $18.5 billion last year under International Financial Reporting Standards.
