Shell's Overstated Oil Reserves Revelation

In the early 2000s, Shell faced a major crisis when it was revealed that the company had overstated its oil reserves. This revelation led to a significant loss of confidence among investors and stakeholders, prompting regulatory scrutiny. The Financial Services Authority imposed a fine of £17 million on Shell for its misleading disclosures. The fallout from the scandal was severe, resulting in the resignation of chairman Philip Watts, who was held accountable for the misrepresentation of the company's assets. The incident not only damaged Shell's reputation but also raised questions about corporate governance and transparency within the oil industry. In response to the crisis, Shell undertook a comprehensive review of its corporate structure, which led to the simplification of its share classes. The company issued two classes of ordinary shares, A and B, which were identical except for the tax treatment of dividends, aiming to restore investor trust and stabilize its operations.