Former Rio Tinto CEO Tom Albanese
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) - The Australian Securities and Investments Commission (ASIC) on Friday launched legal proceedings in the Federal Court in Sydney against Rio Tinto, its former CEO Tom Albanese and its former CFO Guy Elliott.
The proceedings relate to statements, which ASIC alleges were misleading or deceptive, contained in Rio Tinto's annual report for 2011, which was signed on March 5, 2012, and published on March 16, 2012.
In December 2010, Rio Tinto announced a takeover offer for ASX-listed Riversdale Mining, which was completed in August 2011 at a total cost of over $4-billion.
Following the acquisition, Rio Tinto delisted Riversdale and renamed it Rio Tinto Coal Mozambique (RTCM).
Rio Tinto in 2013 announced that it expected to recognise a noncash impairment charge of about $14-billion (post-tax), which included about $3-billion relating to RTCM, for the 2012 financial year.
ASIC alleges that Rio Tinto engaged in misleading or deceptive conduct by publishing statements in the 2011 annual report, signed by Albanese and Elliott, misrepresenting the reserves and resources of RTCM.
Further, by allowing Rio Tinto to engage in such conduct, Albanese and Elliott failed to exercise their powers and discharge their duties with the care and diligence required by law as directors and officers of Rio Tinto.
ASIC is seeking declarations that Rio Tinto contravened Section 1041H of the Corporations Act and that Albanese and Elliott contravened Section 180 of the Corporations Act.
ASIC is seeking, from the court, pecuniary penalties against Albanese and Elliott and has asked that they be disqualified from managing corporations for such periods as the court thinks fit.
ASIC's investigations are continuing in relation to the circumstances surrounding the impairment of RTCM.
ASIC on Friday said it would not comment further at this time.
The UK Financial Conduct Authority in October 2017 fined Rio Tinto £27.39-million for breaching transparency and disclosure rules by failing to carry out an impairment test and to recognise an impairment loss on the value of RTCM in the Rio Tinto 2012 half-year report.
On the same date, the US Securities and Exchange Commission began civil proceedings in the US Federal Court in Manhattan against Rio Tinto, Albanese and Elliott for allegedly inflating the value of RTCM.