Shell must be fully opened

ONE should not be too easily lulled into the view that after the release of an abbreviated report into the reserve accounting scandal at Shell, all the troubles at Britain's second-most important oil company are over.

London-based brokers, including Deutsche Bank and Cazenove, have been quick to upgrade the company's shares following chairman Lord Oxburgh's display of openness.

But there are reasons for caution. Credit rating agency Standard & Poor's thought the disclosures sufficiently worrying that they have stripped the blue-chip firm of its top ranking AAA rating. It noted that it may yet downgrade again once it has seen the 'definitive results' from the Shell review and the 2003 accounts.

S&P is right in wanting to know the full implications of the cover-up and falsification of reserves over several years before giving the company the benefit of the doubt.

It is to be trusted that the British authorities will be just as rigorous in their approach.

If the Financial Services Authority is taking a serious interest in Shell, then it is certainly keeping its powder dry, citing only the listing rules which require full disclosure. The Serious Fraud Office has not yet shown any appetite for a raid on the Shell tower.

Instead, it is being left to the American regulators the Securities and Exchange Commission and the Justice Department to make all the running.

It is unfortunate enough that most of the disclosures of coverup and shady dealings have emerged not from Shell itself but from leaks in the US.

Yet Shell is an Anglo-Dutch company and most of its investors are in Europe. If there is a case to be made against former chairman Sir Philip Watts, the company or other officials, it should be made here.

Britain cannot on the one hand boast that Enron-style accounting practices could not happen in the UK and then cover its ears when a major corporation admits damaging mistakes.

Lord Oxburgh needs to explain more clearly why the full investigatory report has not been published.

Shareholders need to see the report and accounts - replete with qualifications and notes - as soon as possible and Britain's regulators need to demonstrate they are not spineless.

Goldman greed

THERE will be a great deal of schadenfreude in City bars now that the long-running trial of Goldman Sachs personal assistant Joyti De Laurey is over.

Goldman has worked hard in London and New York to become part of the established order.

In America, it has been a dominant force in the Democratic Party, providing a recent Treasury Secretary-Robert Rubin, and a Senator, Joseph Corzine. In Britain, its former chief economic strategist Gavyn Davies, a Labour donor, was elevated to chairman of the BBC.

But behind the image of respectability, the court case revealed a culture where money was so free and easy that a successful mergers and acquisitions banker, Scott Mead, did not even notice that £3m had been funnelled out of his bank account.

There may be good reason for his inaction in that his salary and bonus were paid into a blind trust over which he had little if any day-to-day control.

Nevertheless, the excesses revealed in the trial - including Mead's £50m bonus when Goldman was floated on the stock market - will raise questions as to whether for all its success the New York bank has introduced a culture of rewards and greed divorced from the real economy of output and jobs.

No one can dispute the wealth creation which American investment banks have brought to the City and the broader economy. Nor can we quarrel with the effectivenessof Mead in steering through takeovers, most notably Vodafone's absorption of Mannesmann in 2000.

But a little less personal avarice and more distribution to shareholders, employees and good causes would do the firm's reputation a power of good.

Shares boost

INVESTORS worried that last year's stock market rally was the end of it all will breathe a sigh of relief that the Footsie has hit a 2004 peak at 4569.

The recovery is understandable given the strength of company profits, epitomised by Tesco, and the underlying strength of the British economy as shown by the IMF's spring forecast.

But there are shadows on the horizon. Mercifully, inflation subsided to 1.1% in March, taking some of the sting out of calls for higher interest rates.

But with government borrowing booming on both sides of the Atlantic and the world economy racing away, interest rates will be heading up soon.