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Monday, 15 July, 2002, 06:15 GMT 07:15 UK
Shell stands by accounts
Shell petrol pump stations
Shell reported falling profits earlier this year
Royal Dutch Shell has said that it has full confidence in the trades it carried out in the American energy market.

The energy giant is the latest company to face suspicion over its accounting and business practices.

A former general manager at Shell's Houston unit has claimed in interviews with the Financial Times and Reuters that the company made bets of $7.4bn (4.8bn) on US power prices that could prove worthless.

He has also raised questions about the company's accounting practices.

The collapse of energy giant Enron and the discovery of fraud at WorldCom have combined to damage confidence in US business and the accountants that audit their books.

Conservative accounting

Shell has however said that its accounting of such deals was always "conservative".

"In terms of all large investments, we have a robust review process," a Shell spokeswoman said. " We take a very conservative approach in recognising income from tolling agreements."

George Namur claims that he was asked to come up with optimistic forecasts of future power prices to justify these deals.

The deals were part of Shell's aggressive expansion in the energy trading business. Many companies have cut back their investment, following the collapse of energy giant Enron last year.

In May, Shell reported a big dip in its profits in the first three months of the financial year, with the company blaming the drop in earnings on lower oil and gas prices and weak demand.

See also:

02 May 02 | Business
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