Rio, former executives charged with fraud

SYDNEY: Rio Tinto and two former top executives were charged with fraud by United States authorities yesterday, accused of inflating the value of the company’s Mozambique coal assets and failing to disclose mounting losses.

The world’s second biggest miner vowed to “vigorously” defend the allegations, while announcing it had separately settled a case with Britain’s Financial Conduct Authority about the timing of writing down the same projects.

Under that arrangement, Rio was fined £27.35 million (RM152 million) for breaching disclosure and transparency rules by failing to carry out an impairment review in a timely manner.

The US complaint was filed by the Securities and Exchange Commission in a Manhattan court, said Rio, with the miner, former chief executive Tom Albanese and ex-chief financial officer Guy Elliott facing claims they failed to follow accounting standards and company policies.

The Anglo-Australian giant bought its Mozambique assets for US$3.7 billion in 2011 and sold them for just US$50 million three years later, forced to write off US$3 billion from its value.

The regulator is seeking injunctions, a return of “allegedly illgotten gains plus interest” and civil penalties. It also wants Albanese and Elliott banned from serving as public company officers or directors. AFP