Rio Executive Firing Linked to Internal CEO Feud, Says Conde – by Jesse Riseborough and Franz Wild (Bloomberg News – January 20, 2017)

https://www.bloomberg.com/

The President of Guinea is disputing public statements made by Rio Tinto Group regarding the firing of a senior executive for a $10.5 million payment made to the president’s friend Francois de Combret.

President Alpha Conde said the firing of Alan Davies, who headed Rio’s $20 billion Simandou iron ore project in Guinea, was the result of an internal feud. Rio has said it was because of improper payments to de Combret in 2011 for assisting the company’s negotiations with Conde on the mine.

Davies had been seen as a challenger to Jean Sebastien Jacques prior to the Frenchman becoming chief executive officer in July. “In reality, it was a settling of scores because the new CEO wanted to get rid of Alan Davies,” the 78-year-old Conde, who’s been president since 2010, said in an interview on Wednesday in Davos, Switzerland.

Following an internal probe, Rio in November alerted authorities including the U.S. Department of Justice and the U.K.’s Serious Fraud Office to a $10.5 million payment made in 2011 to de Combret, a veteran French investment banker. The fee was compensation for his assistance in negotiations with Conde, a university friend, after Rio agreed to pay Guinea $700 million to keep hold of its licenses in the country.

Davies and de Combret declined to comment. Davies has previously said there were no grounds to fire him and has vowed to take legal action. Rio also dismissed its head of legal and regulatory affairs following its probe into the payment.

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