New York Comptroller Thomas DiNapoli renewed his call on Friday that Chevron Corp. (NYSE: CVX), the second-largest oil company in the U.S., settle its legal battle against a multibillion-dollar judgment in Ecuador, to avoid further damaging its reputation and shareholder value.
DiNapoli is a trustee of the New York State Common Retirement Fund, which owns an estimated $700 million in Chevron shares. He joined 39 other investors managing $580 billion in assets from the U.S., Canada and Europe, asking that Chevron end its resistance against the Ecuadorean verdict.
In February 2011, a court in Ecuador found Chevron guilty of polluting tracts of the Amazon, and ordered it to pay $18 billion in damages. The case stems from allegations that Texaco improperly cleaned up after decades of operation in the country. Chevron inherited the legal case when it merged with Texaco in 2001.
Since the adverse ruling, the company has fought the Ecuadorean verdict, calling it fraudulent and the product of malicious intent.
But DiNapoli said Chevron should pay the fine and put this issue to rest.
The time for delay is over, DiNapoli said. The company's attempt to undo the court's verdict only keeps the case in the public eye and further damages Chevron's reputation. Chevron's actions are hurting shareholders as well as the indigenous people of the rainforest.
The renewed call mirrors a previous request DiNapoli made back in 2008, which was not heeded by Chevron. Since then, the Ecuadorean judgement has been upheld in an Ecuadorian court and prosecutors there said they can start enforcing the judgment by seizing Chevron's assets throughout the world.
On May 14, some of the company's shareholders asked the Securities and Exchange Commission to investigate claims Chevron management was not properly informing them of the risks facing the company in light of the $18 billion pending judgement.
Chevron still has an appeal pending in Ecuador's high court, and has had a racketeering case it filed against the head lawyer for the Ecuadorian plaintiffs upheld in New York.
In Friday trading on the New York Stock Exchange, Chevron fell $1.20 to $98.86 a share.