Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

MarketScreener Homepage  >  Commodities  >  LME Zinc Cash       

My previous session
Most popular
News SummaryAll newsTweets

Australia Regulator Starts Legal Action Against Rio Tinto, Former Executives Over Mozambique -- Update

share with twitter share with LinkedIn share with facebook
share via e-mail
03/02/2018 | 09:18am CEST

By Rhiannon Hoyle

SYDNEY--Australia's corporate regulator said it has started legal action against Rio Tinto Ltd. and two former executives, alleging they deceived investors over Mozambique coal assets bought for $4 billion in 2011.

It 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.

The Australian Securities and Investments Commission said Friday it commenced proceedings in the Federal Court in Sydney against Rio Tinto, former Chief Executive Thomas Albanese and former Chief Financial Officer Guy Elliott. It alleges Rio Tinto misrepresented the reserves and resources of the Mozambique coal assets in its 2011 annual report, signed by the two men.

Rio Tinto said it will respond once it has considered the allegations in full.

The regulator said it wants the court to declare that Rio Tinto, Mr. Albanese and Mr. Elliott contravened Australia's Corporations Act, impose financial penalties on the two former executives and bar them from managing companies for an unspecified period of time.

In October, the SEC's allegations led Mr. Elliott to resign from the board of Royal Dutch Shell PLC.

The SEC lawsuit alleges Rio Tinto continued to value the mining assets in Mozambique at more than $3 billion after an internal assessment put their worth at negative $680 million.

The SEC lawsuit is pursuing civil financial penalties and disgorgement of ill-gotten gains. Separately, Rio Tinto agreed to pay GBP27 million ($37.2 million) to settle claims by the U.K. Financial Conduct Authority that the company was slow in writing down the value of the Mozambique mine.

Mr. Albanese resigned in 2013 after the company announced a global write-down of $14 billion, including $3 billion in Mozambique, as commodity markets slumped. Rio Tinto sold the Mozambique coal business in 2014 for $50 million.

The Australian regulator said its investigation into "the circumstances surrounding the impairment" of the Mozambique assets continues, and declined to comment further.

Outgoing Rio Chairman Jan du Plessis said in the company's annual report this week, "The investment in 2011 of $4 billion in Mozambique in what ultimately turned out to be inferior-quality coal assets was undoubtedly a low point during my tenure." The report, though, called the SEC case "unwarranted" and pledged a vigorous defense.

Mozambique isn't the only regulatory challenge for the world's second-largest listed mining company. Authorities in the U.S., U.K. and Australia are investigating a $10.5 million payment made to a consultant to help it acquire rights to a large iron-ore deposit in Guinea known as Simandou.

Rio Tinto, in the annual report, said it is cooperating.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
LME COPPER CASH 2.41% 6203 End-of-day quote.-13.62%
LME ZINC CASH 0.21% 2441 End-of-day quote.-27.72%
RIO TINTO 2.72% 3921 Delayed Quote.-0.53%
RIO TINTO LIMITED -1.22% 78.52 End-of-day quote.4.85%
SILVER -0.22% 14.225 Delayed Quote.-15.53%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on LME ZINC CASH
09/20Rio Tinto Shares Rise After Buyback; Likely to Boost PICK ETF
09/13Smartphones, Electric Cars Keep Miners Digging by -2-
09/13Smartphones, Electric Cars Keep Miners Digging by Hand in Congo--Update
09/13Smartphones, Electric Cars Keep Miners Digging by -2-
09/13Smartphones, Electric Cars Keep Miners Digging by Hand in Congo--Update
08/21Rio Tinto Opens Fourth Mining Pipe at Diavik Diamond Mine
08/09Rio Tinto Mulls Listing Its Canadian Iron Ore Business -Reuters
08/01Rio Tinto Approves $146 Million Funding for Planned Iron Ore Mine
07/31HINDUSTAN ZINC : Smelter closure hurts India's Vedanta, first-quarter profit lag..
07/26Teck Will Seek Partner for Quebrada Blanca Phase 2, Posts Higher Profit
More news
Duration : Period :
LME Zinc Cash Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends LME ZINC CASH
Short TermMid-TermLong Term