Investor anger over Shell bill

SHELL shareholders yesterday expressed anger at a €120 million tax bill that will follow the biggest overhaul in the oil giant’s 100-year history.

They accused the board of “hanging them out to dry” by devising a scheme to unify its British and Dutch assets that leaves many facing large losses from capital gains tax.

Shell Transport, which has its headquarters in London, plans to merge with Netherlands-based Royal Dutch Petroleum next month as it strives to eliminate failings that led to its reserves crisis last year.

The enlarged company - to be called Royal Dutch Shell - will be listed on the FTSE 100 index with a potential value of more than €180bn and will vie with rival BP as the biggest quoted firm in Britain.

The unified company will represent around 10% of the Footsie and the energy sector as a whole will rival the size of the banking sector.

The plan won the overwhelming support of investors at the annual meeting of Shell yesterday, but only after the board faced a barrage of criticism over the tax burden and fears that the voice of private shareholders in Britain will no longer be heard.

British investors who hold shares in the Dutch side of the business will have to pay capital gains tax of 40% by law when their stock is converted into Royal Dutch Shell’s. Chairman Ronald Oxburgh said the firm sympathised with shareholders but its hands were tied and it could only urge them to seek financial advice.

Shell, which made profits of €14bn last year, downgraded its reserves five times during a crisis that claimed the scalps of three senior executives and led to regulators in Britain and the US imposing fines totalling €125m. It is still facing a number of investigations related to the downgrade.

Earlier the meeting was disrupted by environmentalists and representatives of communities that live close to Shell plants and pipelines. They were escorted out of the meeting shouting “Shell is hell” after criticising the firm’s environmental record in countries like Nigeria, Russia and the US.

A representative from South Africa presented Mr Oxburgh with a miniature coffin claiming Shell’s refinery in Durban had a detrimental impact on the health of local communities.