REGULATION

ASIC launches action against Rio

THE Australian Securities and Investments Commission has joined the US Securities and Exchange Commission in launching proceedings against Rio Tinto, its former CEO Tom Albanese and its former CFO Guy Elliott.

Kristie Batten
ASIC launches action against Rio

The Federal Court proceedings relate to statements which ASIC alleges were misleading or deceptive contained in Rio’s 2011 annual report for 2011, which was signed off on and published on in March 2012.

Like the SEC proceedings, ASIC’s action relates to Rio’s ill-fated US$3.7 billion takeover of Riversdale Mining.

ASIC alleges that Rio 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 the Mozambique coal assets acquired in the Riversdale deal.

The corporate watchdog said that by allowing Rio 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 the company.

ASIC is seeking declarations that Rio contravened s1041H of the Corporations Act 2001 and that Albanese and Elliott contravened s180 of the Corporations Act.

ASIC has sought from the court pecuniary penalties against Albanese and Elliott and that they be disqualified from managing corporations for such periods as the court thinks fit.

Elliott is a current director of Royal Dutch Shell, as well as a member of the British Takeovers Panel. Albanese is on the board of streaming major Franco-Nevada Corporation and was recently appointed to the advisory committee of Nevada

Investigations are continuing in relation to the circumstances surrounding the $3 billion impairment of the Mozambique assets in 2012, but ASIC said it would not be making any further comment at this time.

In October 2017, the UK Financial Conduct Authority announced it had fined Rio £27,385,400 for breaching transparency and disclosure rules by failing to carry out an impairment test and to recognise an impairment loss on the value of the coal assets in 2012.

That coincided with the launch of civil proceedings in the US.

ASIC thanked both overseas bodies for their assistance and collaboration over the matter.

Speaking at Mining Indaba last month, Albanese was unable to say much given the matter is still active..

“I feel the case is without merit and I’m going to vigorously defend it,” he said.

“Many of you in the room have worked with me and will know that I’ve always stood for transparency and strong ethics so I’ll leave it for you to be the judge.”

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

editions

MiningNews.net Research Report 2024

Access a multi-pronged tool to identify critical risks and opportunities in Australia’s mining industry.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.