CRIMINAL CAPITALI$M TAX AVOIDANCE

Shell set for new corporate name as oil giant severs century-old Dutch link

Shareholders have voted overwhelmingly in favour of a plan to end the company's dual share structure and move its headquarters to London from the Netherlands

Proposal will see the company renamed simply as Shell Plc, losing the 'Royal Dutch' title it has had for more than a century.

FRI, 10 DEC, 2021 - 18:00
TOSTERLING AND RON BOUSSO

Royal Dutch Shell shareholders have voted overwhelmingly in favour of a plan to end the company's dual share structure and move its headquarters to London from the Netherlands.

The proposal will see the company renamed simply as Shell Plc, losing the "Royal Dutch" title it has had for more than a century, with approval by 75% of shareholder votes cast.

Shell board members were to meet later to make a final decision, with the move planned sometime in early 2022. The company's boards presented the plan in November, saying the simplification would strengthen Shell's competitiveness and make paying dividends and share buybacks easier.

Critics say Shell's decision was motivated in part by a Dutch court ruling in May that ordered it to cut carbon emissions by 45% by 2030. Shell, which is appealing the ruling, says its environmental policy will not be affected by the move.

"We have considerable operations here in the Netherlands... and that will not be changed one bit by the possible change in location," chairman Andrew Mackenzie said ahead of the vote. A group of protesters outside Friday's meeting in the Dutch port city of Rotterdam chanted "Shell must fall!". One banner read: "You can't run and you can't hide from Climate Justice."

Taxation a factor in move

Taxation was a factor in the move. Because the company's headquarters and tax home are now in the Netherlands, dividends it pays on its "A" shares are subject to a 15% Dutch withholding tax. Equal payments for "B" shares are distributed through a Dividend Access Mechanism that sees them streamed via a trust registered on Jersey to avoid the Dutch tax.

The new single-share structure and British tax home will resolve those issues, as Britain does not levy a dividend withholding tax. It plans to return $7bn (€6.2bn) in proceeds to shareholders from the sale of gas assets in the US.

The Dutch government said it was "disappointed" by Shell's decision. A member of the Green party raised the idea of levying an "exit tax" on the company, but failed to gain support.

Meanwhile, rival BP is beefing up its bid to develop wind projects off Scotland’s coast with the promise of creating hundreds of local jobs if it wins.

The pledge comes amid intense competition to develop wind power off Scotland’s coast and as the oil and gas giant continues a push to expand its offshore wind footprint in the UK and abroad. Partnered with German utility EnBW Energie Baden-Wuerttemberg, BP is among firms awaiting the results of the latest auction of British seabed rights.

If successful, the companies will build some 2.9GW of wind power capacity offshore Scotland, adding to another 3GW they are already developing in the Irish Sea.

• Reuters and Bloomberg