Big Investors Sue Shell Over Losses

A group of major European shareholders is suing Royal Dutch Shell for several hundred million dollars in damages after the company’s 2004 oil reserves accounting scandal, their lawyers said Monday.

The 26 institutional investors represent as much as 5% of Shell’s stock. They are led by Dutch pension fund ABP -- the world’s second-largest pension fund by assets.

The investors say they should be compensated for losses suffered when Shell’s stock fell after the company admitted overstating the size of its estimated oil and gas reserves by as much as 33%.

According to the filing made Friday in U.S. District Court in New Jersey, Shell made “materially false and misleading statements” between 1997 and 2003 that caused the investors “to sustain substantial losses.”

Jay Eisenhofer, representing the investors, said that it was too early to determine the exact amount of damages they would seek, but that it would probably amount to “several dollars per share, or several hundreds of millions” in total.

A Shell spokeswoman said the company “contests these claims and will vigorously defend itself against the action.”

Shell has paid $90 million to settle one lawsuit brought by employee shareholders and is facing a separate shareholder class-action lawsuit in the same New Jersey court.

Shell has protested that U.S. courts shouldn’t have jurisdiction over the Anglo-Dutch oil company, which is based in The Hague, Netherlands. But in August, federal Judge John Bissell ruled that the U.S. case could continue.