Australia regulators expand case against Rio Tinto

Posted on 02 May 2018

Source: MarketWatch

Australia’s corporate regulator Tuesday said it has expanded its legal action against Rio Tinto Ltd. RIO and two former executives, over mining assets in Mozambique.

The Australian Securities and Investments Commission commenced proceedings against Rio Tinto, former Chief Executive Thomas Albanese and former Chief Financial Officer Guy Elliott in March, alleging they deceived investors over Mozambique coal assets bought for $4 billion in 2011. At the time it alleged Rio Tinto misrepresented the reserves and resources of the Mozambique coal assets in its 2011 annual report, signed by the two men.

On Tuesday, the regulator said it is taking further action, alleging that Rio Tinto failed to recognise an impairment of the Mozambique coal assets in its 2012 Interim Financial Statements, failed to disclose the substantial impairment, and other related breaches of the country’s Corporations Act.

The Australian action follows a U.S. lawsuit that began in October, in which the Securities and Exchange Commission alleges Rio Tinto misled investors about the value of the assets, acquired in its takeover of Riversdale Mining Ltd. 

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