ASIC takes action against Rio Tinto and former execs over Mozambique mine disclosures

ASIC has launched legal action against Rio Tinto and former execs Tom Albanese and Guy Elliott over Mozambique claims.

Matt Chambers

Drilling in progress at Riversdale Mining’s Mozambique mine. (Scott Douglas/Bloomberg)

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4:26PMMarch 02, 2018.

Updated 5:26PMMarch 02, 2018

The corporate watchdog has alleged Rio Tinto, its former chief executive Tom Albanese and former chief financial officer Guy Elliott, engaged in misleading or deceptive conduct in the reporting of Mozambique coal reserves and resources.

The Australian Securities and Investments Commission said it had commenced legal proceedings in the Federal Court in Sydney against Rio and the two former executives.

“The proceedings relate to statements which ASIC alleges were misleading or deceptive contained in the RTL annual report for 2011,” ASIC said.

The proceedings come after the US Securities and Exchange Commission last year brought fraud charges against Rio and the two former executives alleging they delayed impairments on $US3 billion of assets that were eventually written down to nearly zero value.

“ASIC alleges that Rio engaged in misleading or deceptive conduct by publishing statements in the 2011 annual report, signed by Mr Albanese and Mr Elliott, misrepresenting the reserves and resources of RTCM (Rio Tinto Coal Mozambique),” ASIC said.

“Further, by allowing Rio Tinto 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 Rio Tinto.”

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

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

Rio has said it will vigorously defend the US fraud charges.

It has been approached for comment on the ASIC proceedings.