Sir Philip Watts, in his first public statement since he was ousted as chairman of the Royal Dutch-Shell Group in March, said on Thursday that British financial regulators had violated his rights in their investigation of the company's restatement of its oil and natural gas reserves.
Denying that he had misled investors, Watts said that the UK's Financial Services Authority "violated my statutory rights to review and rebut" accusations made in a July 29 order charging Shell with market abuse. Shell paid a fine of ?17 million (US$30 million), the largest ever levied by UK market regulators. At the time, it also agreed to US$120 million in fines in a settlement with the US Securities and Exchange Commission.
The challenge by Watts was the first time that findings by the Financial Services Authority have been directly contested by an executive at a company that had been investigated, lawyers here said.
Watts' statement was released as his lawyers asked the Financial Services and Markets Tribunal, an independent appeals body in the UK, to review the regulator's actions. The notice was made available by Joseph Goldstein, a lawyer for Watts with the firm of Crowell & Moring in Washington. Goldstein said Watts was not available for an interview and had no comment beyond the statement.
Watts asked the tribunal to review the investigation and take into consideration evidence he will submit. The tribunal must respond within 28 days. Officials at the Financial Services Authority said they were aware of the filing but had no comment.
John Wade, a partner in the law firm of Dorsey & Whitney in New York, said the filing had been an unusual approach. Challenging a regulator is "like staring into the eyes of a gorilla," Wade said. "I don't think I've ever seen anyone take that approach with the SEC."
The July order from the UK regulators did not name Watts. But he could be "readily identified" by referring to other public sources, according to the notice filed by his lawyers. UK law requires the Financial Services Authority to give any third party the right to see evidence and offer a defense in actions where they are identified.
Watts' filing also claimed that the unusually short four-month investigation was "fundamentally flawed," in part because it was "based on an investigation that the FSA has yet to complete."
In his statement, Watts also denied that he had waited to address problems in Shell's oil and gas division until years after he knew about them, a theory put forward in a report released by the company in April.
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