U.S. SEC charges Rio Tinto, former top executives with fraud – by Jonathan Barrett and Brendan Pierson (Reuters U.S. – October 17, 2017)

http://www.reuters.com/

SYDNEY/NEW YORK (Reuters) – The U.S. Securities and Exchange Commission (SEC) on Tuesday charged mining company Rio Tinto Plc (RIO.L) (RIO.AX) and two of its former top executives with fraud, saying they inflated the value of coal assets in Mozambique and concealed critical information while tapping the market for billions of dollars.

The U.K.’s Financial Conduct Authority (FCA) also said on Tuesday it had reached a settlement with Rio Tinto under which the company would pay a fine of £27 million ($35.6 million) to settle claims that it breached accounting rules in connection with the Mozambique assets.

The Mozambican coal business, which relied on barging the product down the Zambezi River to port, was acquired for $3.7 billion in 2011 from Riversdale Mining and sold a few years later for $50 million.

In a lawsuit filed in U.S. federal court in Manhattan, the SEC said Rio Tinto, former Chief Executive Officer Thomas Albanese, and former Chief Financial Officer Guy Elliott failed to follow accounting standards and company policies to accurately value and record the assets.

The SEC said that soon after the deal was completed, Rio Tinto learned that the acquisition would yield less coal, and of a lower quality, than expected. The global miner could only transport and sell a fraction of the coal it had originally assumed, the SEC said.

For the rest of this article: http://www.reuters.com/article/us-rio-tinto-plc-fraud/u-s-sec-charges-rio-tinto-former-top-executives-with-fraud-idUSKBN1CM37I?il=0

 

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