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Australia corporate watchdog takes Rio Tinto to court
[SYDNEY] Australia's corporate watchdog on Friday took mining giant Rio Tinto and two former top executives to court for allegedly engaging in "misleading and deceptive conduct" by misrepresenting the value of its Mozambique coal assets.
Rio, the world's second-largest miner, has drawn the scrutiny of global regulators in recent years over the purchase of the Mozambique assets for US$3.7 billion in 2011.
The Anglo-Australian firm sold them for just US$50 million three years later, writing off $US3.0 billion from its value. Former chief executive Tom Albanese lost his job over the issue.
The Australian Securities and Investments Commission (ASIC) alleged Friday in its submission to the Federal Court in Sydney that Albanese and chief financial officer Guy Elliott misrepresented the "reserves and resources" of the Mozambique assets in its 2011 annual report, published after the announcement of the purchase.
"Further, by allowing RTL (Rio Tinto Limited) to engage in such conduct, Mr Albanese and Mr Elliott failed to exercise their powers and discharge their duties with the care and diligence required by law as directors and officers of RTL," ASIC said in a statement.
ASIC alleged that the miner and the pair had breached Australia's Corporations Act through their actions.
The watchdog said it wanted the court to fine Albanese and Elliott and bar them from managing corporations for a period of time.
Rio and the two ex-chiefs were charged with fraud by US regulator the Securities and Exchange Commission (SEC) in October last year over similar allegations.
The regulator accused them of inflating the value of the assets and failing to disclose mounting losses.
There was no immediate comment from Rio on Friday regarding the ASIC action, but the miner had said last year in response to the SEC charges that the case was "unwarranted".
Rio has also separately settled a case with Britain's Financial Conduct Authority about the timing of writing down the same projects.