Rio Tinto hit with record FCA fine and United States fraud charges

19 October, 2017, 00:27 | Author: Terri Saunders

The Securities and Exchange Commission (SEC) has filed a complaint in a federal court in NY alleging that Rio, Albanese, and former finance director Guy Elliott, deliberately inflated the value of the assets.

As the project began to suffer setbacks, resulting in the rapid decline of the value of the coal assets, Albanese and Elliott sought to hide or delay disclosure of the nature and extent of the adverse developments from Rio Tinto's board of directors, auditors, and investors, the SEC alleges.

The SEC filing is seeking to achieve permanent injunctions, return of allegedly ill-gotten gains plus interest, civil penalties from all the defendants, and to bar Albanese and Elliott from serving as public company officers or directors.

In a statement, Rio Tinto said it would "vigorously defend itself" in the SEC case.

The mining giant continued to value the business at more than $3 billion through 2011 and 2012 even after discovering early on that it could sell "only about five percent" of the coal it had originally anticipated, and that the mine had "significantly less and lower quality coal" than it initially assumed, the SEC complaint states. "They tried to save their own careers at the expense of investors by hiding the truth", SEC Enforcement Division co-director Steven Peikin said.

Rio Tinto bought into Mozambique's coking coal district in 2011 when it raised its initial $3.5bn bid for Riversdale Mining to $3.9bn in an effort to win over the last remaining shareholders who had been holding up the transaction. Between 2014 and August Albanese served as CEO of of FTSE 250-listed miner Vedanta Resources PLC.

As a result of the charges, Mr Elliott stood down from his role as a non-executive director at oil group Royal Dutch Shell.

"We fully respect and appreciate Guy's decision which is related to his involvement in legal proceedings regarding his former employment at Rio Tinto", Shell chairman Charles Holliday said in a statement.

The lawsuit accuses the Australian-British multinational corporation and former company executives of 12 counts of federal securities violations.

At least seven martyred, 22 injured in Quetta truck bombing
Members of the minority Shiite community and security forces are frequently attacked by militants in the province. WAZIRISTAN: In a separate incident in North Waziristan, two security personnel were killed in a roadside blast.


The company added: "SEC case is unwarranted and that, when all the facts are considered by the court, or if necessary by a jury, the SEC's claims will be rejected".

America's financial regulator, the Securities and and Exchange Commission, filed a complaint in federal court in Manhattan.

Rio Tinto was separately fined £27.4m by the UK's financial watchdog for breaching disclosure and transparency rules over its handling of the Mozambique mining assets.

It was not until January 2013 that the company announced an impairment, writing off about 80% of the value of the investment.

Morgan Stanley set a GBX 3,700 ($49.16) price objective on Rio Tinto plc (LON:RIO) in a research report report published on Tuesday.

The FCA said that Rio Tinto, had it complied with its obligation to carry out an impairment test, would have impaired RTCM in its August 2012 half year results.

"Rio Tinto's financial reporting was therefore inaccurate and misleading", the FCA said.

"Reflecting the size of the company, this is the largest fine imposed to date by the FCA for a breach of rules relating to a firm's official listing and demonstrates how vitally important high standards of disclosure and transparency are to ensuring our markets function fairly and effectively".

Recommended:



Popular

Billy Joel to Be a Father for the Third Time
Just before the couple welcomed Della in 2015, Billy opened up about becoming a father in his 60s in an interview with UPI . His first marriage to Elizabeth Weber ended in the 1980s, before he met and married supermodel Christie.

Thousands of Rohingya refugees stranded near Bangladesh-Myanmar border
Witnesses say that a new wave of refugees started crossing the border over the weekend. Many of them walked for a week before they could cross over to Bangladesh.

All the Fabulous Pics and Details From Gucci Mane's Wedding
The guest list included celebs such as fellow rappers Lil Yachty , 2 Chainz , Big Sean , and Rick Ross , mogul Sean "P. Ka'oir told People magazine that she wanted "a royal wedding" with "all white with diamonds and crystals ".

Second federal judge blocks new Trump travel ban
The president had then revoked and replaced his first travel ban, which had also been held up in court. Chuang said he would rule later on whether to grant the challengers' request for an injunction .

Kenya's elections chief says hard to guarantee credible presidential poll
In a statement , Dr Akombe said the repeat election as planned can not meet the basic expectations of a credible election. Election staff attending training sessions in some opposition strongholds were attacked this week, police said.

Giant Ford F-Series Truck Recall to Cost $267 Million
Affected trucks are 1.1 million in the United States, more than 222,000 in Canada and 21,000 trucks in Mexico. The vehicles affected include both the F-series and the brand's Super Duty vehicles in North America.

Fall Update Released; Everything to Know
If your console is set to receive automatic updates, chances are that you'll already have it installed when you turn it on. Moreover, Microsoft has rearranged the Dashboard so that players can easily switch between the different sections.

Pakistan wins seat on United Nations rights council
The only contested slate was in Asia where six countries vied for four seats. Qatar, Pakistan and Afghanistan were also elected from the region.

"How many Jews were killed in the Holocaust?" — Scaramucci Twitter
He lasted just 10 days in his White House job during which he went on a foul-mouthed rant to a journalist which was made public. The poll allowed Twitter users to select a number of options ranging between less than one million to more than five million.

Rui Vitoria backs Victor Lindelof to flourish at Manchester United
Benfica , on the other hand, simply need three points to preserve any hopes of moving to the next round after succumbing to a home defeat to CSKA Moscow alongside suffering a 5-0 drubbing at the hands of FC Basel .