Rio Tinto readying for fight
RIO Tinto chairman Simon Thompson says the mining giant is committed to a culture of transparency and integrity, and will vigorously defend itself against allegations of fraud.
The Australian Securities and Investments Commission on Tuesday updated its allegations against Rio Tinto, its former chief executive Tom Albanese and former chief financial officer Guy Elliott related to a failed $5.3 billion Mozambique coal venture six years ago.
The corporate regulator said both men breached auditing rules when they signed off on the miner’s 2012 half-year report that listed the Mozambique coal mine as an operating asset worth $US3.4 billion, but then sold it in 2014 for $US50 million.
Mr Albanese and Mr Elliott failed to comply with auditing rules and failed to exercise their powers and discharge their duties with care and diligence, ASIC alleges.
ASIC also added four allegations against the company, which include engaging in misleading or deceptive conduct, as well as breaking market disclosure rules.
Speaking at Rio Tinto’s annual general meeting in Melbourne yesterday, Mr Thompson said the company “strenuously deny these allegations and will vigorously defend ourselves in court”.
“As I visit our operations around the world, I am convinced that Rio Tinto’s culture is both strong and healthy and that there is a good understanding and strong support for our shared values,” he said.
“I can assure you that the entire board is committed to embedding a culture of transparency, integrity and respect at Rio Tinto.”
Rio Tinto in October reached a settlement with the UK’s Financial Conduct Authority over the value of its investment in the Mozambique coal venture, and paid a penalty of $36.4 million for breaching disclosure and transparency rules.
The US Securities and Exchange Commission has also laid fraud charges against Mr Albanese and Mr Elliott, alleging they breached their disclosure obligations and corporate duties by hiding from their board, auditor, and investors the failure of the multi-billion dollar transaction.