The Royal/Dutch Shell Group said the overstatement of its proven oil and gas reserves and inappropriate accounting in other business segments resulted in profits being exaggerated by $432 million in years before 2003. The revision followed an embarrassing series of disclosures that reduced the company's reported reserves by nearly one-quarter and led to the departure of several top executives. But because the oil giant also adopted some changes in how it will account for inventories, its newly reported net income for 2002 was actually higher than previously reported: $9.72 billion, up from $9.42 billion. It revised its 2001 net income to $10.35 billion, down from $10.85 billion.
Courts Bars Amtrak Strike
Amtrak employees cannot legally walk off the job to protest what they call chronic government underfunding of the passenger railroad, a federal appeals court ruled. Amtrak lost its initial lawsuit in federal court last October to prevent the walkout. The unions agreed that they wouldn't do anything until a higher court ruled on the railroad's appeal.
Jurors completed a full week of deliberations without reaching a verdict in the fraud and conspiracy trial of four former Adelphia Communications executives. The jury will return Tuesday from the Independence Day holiday to consider the case against Adelphia founder John Rigas, former finance chief Timothy Rigas, former secretary Michael Rigas and former assistant treasurer Michael Mulcahey.
Bank of America will pay $69 million to settle its part of a lawsuit brought on behalf of investors who bought Enron securities between October 1998 and November 2001. The University of California is the lead plaintiff among large institutional investors.
Delta Air Lines plans to submit a restructuring plan that includes labor-cost-cutting measures to its board in late August, according to chief executive Gerald Grinstein. He said in a memo to employees that the plan also includes operational restructuring and innovation he believes the carrier will need to survive and compete. Delta has warned that bankruptcy is a possibility if it does not get the cuts.
Caremark Rx said 19 states are probing its business practices. The Nashville pharmaceutical benefits management company said it received an administrative subpoena about its consumer protection statutes and business practices from Washington state's attorney general. Caremark said that officials in that state told the company that 18 other states would follow with their own investigative demands.
Nortel Networks said it would seek repayment of what outsiders have estimated as $20 million in executive bonuses if it finds they were based on inflated financial results. The Canadian telecommunications equipment manufacturer fired three top executives, including its chief executive, in April and announced plans to restate its financial reporting going back to 2001. The company is being investigated by the Justice Department and the Securities and Exchange Commission in the United States, and by the Ontario Securities Commission.
Parmalat Finanziaria, the Milan food company that filed for bankruptcy after it was unable to document about $11 billion it claimed to have in its accounts, won a court order blocking U.S. creditors from interfering with its attempts to reorganize in Italy.
A Japanese bank launched a new type of account requiring security-conscious customers to prove their identity by showing the pattern of veins on their palms. Suruga Bank introduced the system because vein patterns on human hands are very difficult to forge, a spokeswoman said.
GEICO, the Chevy Chase insurance company, was ordered to pay overtime to 280 of its auto damage adjustors by a federal judge in Washington. The company, which employs 1,800 locally and 21,000 nationwide, and the adjustors have until July 30 to come up with a plan for determining back pay and damages. The workers alleged that GEICO had violated overtime rules since 1998 by not paying the employees the necessary time and a half pay for work over 40 hours a week. The company acknowledged the adjustors averaged 60 hours or more a week but claimed they were exempt.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.