Rio Tinto shareholders flag culture of fear concerns – by Neil Hume and Jamie Smyth (Financial Times – November 27, 2016)

Large shareholders in Rio Tinto have voiced concerns about the miner’s handling of a payments crisis in Africa, accusing it of failing to stand behind senior executives in the face of possible anti-bribery investigations.

The decision to sack Alan Davies, an executive once in charge of a controversial iron ore project in Guinea, risks creating a culture of fear inside Rio, two investors told the Financial Times, warning it could slow decision-making and cost them future deals.

“This has to have an impact,” said one top 10 shareholder who declined to be named. “The message it sends [to senior managers] is that you’re expendable.”

Rio’s chief executive Jean-Sébastien Jacques, who took charge in July, is facing increased scrutiny as the crisis continues to unfold. Rio has not said what its internal inquiry found that warranted the sacking of Mr Davies and legal head Debra Valentine.

Mr Davies, who ran Rio’s coal and uranium business before his dismissal earlier this month, was popular with investors in the City and within the company. He has attacked the decision to sack him and his allies claim he followed Rio’s own internal guidelines when managing the Simandou project in 2011.

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