Royal Dutch Shell plc said it will appeal a federal judge’s ruling that its shareholders had “adequately” shown reason for the court to examine allegations concerning restatements of its oil and natural gas reserves last year. The class action lawsuit by two pension funds was filed last year questioning whether Shell, and its executives and auditors purposely omitted important facts concerning the company’s restatements (see Daily GPI, June 28, 2004).

In July, Shell agreed to pay $90 million to settle another U.S. lawsuit brought by pension holders following the company’s writedowns (see Daily GPI, July 13).

The ruling this week by the Superior Court of New Jersey, Middlesex County requires plaintiffs and defendants to exchange information, but Shell said it planned to appeal the ruling. Shell said it questions whether the court has jurisdiction “over non-U.S. purchasers who bought their securities on non-U.S. markets.” Shell’s main headquarters are in The Hague, Netherlands, and in London.

However, U.S. Chief District Judge John W. Bissell said in an opinion that Shell’s global footprint does not prevent it from being sued in New Jersey. Plaintiffs filed their lawsuit in New Jersey because Shell has gasoline distribution terminals there.

Shell spokesman Simon Buerk said the decision “reflects a ruling at an early procedural phase of the case that presents the court’s views on the scope of its statutory jurisdiction and the adequacy of plaintiffs’ complaint. The decision does not reflect whether plaintiffs ultimately will be able to prove any of the claims they have alleged.”

Several reserve restatements, beginning in January 2004, led to declines in the company’s share price (see Daily GPI, May 25, 2004). Lawsuits were filed against the company, some executives and its accounting firms, PricewaterhouseCoopers and KPMG. The reductions led to $151 million in fines imposed by U.S. and British regulators, and Shell also fired three senior executives involved in the restatements.

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