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| Asic could pursue criminal charges against Rio Tinto executives | Asic could pursue criminal charges against Rio Tinto executives |
| (3 months later) | |
| Corporate watchdog is working with US SEC over claims the mining giant failed to accurately value a Mozambique coal asset | |
| Gareth Hutchens | |
| Thu 26 Oct 2017 04.27 BST | |
| Last modified on Thu 26 Oct 2017 04.33 BST | |
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| Australia’s corporate regulator has revealed it could pursue criminal charges against Rio Tinto executives after the company failed to promptly tell shareholders about a multi-billion dollar write-down of a coal asset in Mozambique. | Australia’s corporate regulator has revealed it could pursue criminal charges against Rio Tinto executives after the company failed to promptly tell shareholders about a multi-billion dollar write-down of a coal asset in Mozambique. |
| Greg Medcraft, the chairman of the Australian Securities and Investments Commission (Asic), was asked a series of questions in Senate estimates on Thursday about Rio Tinto’s disastrous $4bn purchase of Riversdale Mining Company in Mozambique in 2011. | Greg Medcraft, the chairman of the Australian Securities and Investments Commission (Asic), was asked a series of questions in Senate estimates on Thursday about Rio Tinto’s disastrous $4bn purchase of Riversdale Mining Company in Mozambique in 2011. |
| Rio Tinto purchased the company while Tom Albanese was chief executive, and Guy Elliot was chief financial officer. | Rio Tinto purchased the company while Tom Albanese was chief executive, and Guy Elliot was chief financial officer. |
| The mining giant has already been fined £27.4m in the UK after being accused of overstating the value of the coal project. | The mining giant has already been fined £27.4m in the UK after being accused of overstating the value of the coal project. |
| The United States Securities and Exchange Commission (SEC) has also filed a complaint in federal court in Manhattan, alleging Rio Tinto, Albanese and Elliot failed to follow accounting standards and company policies to accurately value and record the African coal asset. | The United States Securities and Exchange Commission (SEC) has also filed a complaint in federal court in Manhattan, alleging Rio Tinto, Albanese and Elliot failed to follow accounting standards and company policies to accurately value and record the African coal asset. |
| The SEC has claimed that within months of the 2011 purchase, Rio’s internal modelling found the value of Riversdale was between negative $3.45bn and negative $9bn, rather than $4bn, and Albanese and Elliot did not immediately tell shareholders about the write-down. | The SEC has claimed that within months of the 2011 purchase, Rio’s internal modelling found the value of Riversdale was between negative $3.45bn and negative $9bn, rather than $4bn, and Albanese and Elliot did not immediately tell shareholders about the write-down. |
| It has alleged 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. | It has alleged 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. |
| Medcraft told senators on Thursday that Asic officials had been working with the SEC “from day one” on the case, and it still had a long way to go with the investigation. | Medcraft told senators on Thursday that Asic officials had been working with the SEC “from day one” on the case, and it still had a long way to go with the investigation. |
| “We’re not finished yet,” he said. “As I always say it’s a journey; the journey hasn’t finished yet.” | “We’re not finished yet,” he said. “As I always say it’s a journey; the journey hasn’t finished yet.” |
| The Greens senator Peter Whish-Wilson, an economist who has worked on Wall Street, wanted to know if Asic would bring its own charges against Rio Tinto executives, given that Rio was a dual-listed company in Australia and the UK, and Asic hadn’t launched legal action yet. | The Greens senator Peter Whish-Wilson, an economist who has worked on Wall Street, wanted to know if Asic would bring its own charges against Rio Tinto executives, given that Rio was a dual-listed company in Australia and the UK, and Asic hadn’t launched legal action yet. |
| Medcraft replied: “We could. Correct. Watch this space.” | Medcraft replied: “We could. Correct. Watch this space.” |
| John Price, Asic commissioner, then told senators that Asic’s investigation was “well progressed” and “all enforcement options are on the table.” | John Price, Asic commissioner, then told senators that Asic’s investigation was “well progressed” and “all enforcement options are on the table.” |
| Guardian Australia understands that to mean that civil and criminal proceedings, against both individuals and the company, could be on the horizon. | Guardian Australia understands that to mean that civil and criminal proceedings, against both individuals and the company, could be on the horizon. |
| Medcraft said Asic had had discussions with the SEC about the US regulator taking the lead in the investigation because it had a higher penalty regime and more resources. | Medcraft said Asic had had discussions with the SEC about the US regulator taking the lead in the investigation because it had a higher penalty regime and more resources. |
| He said regulators in the UK could also take action against Rio Tinto by administrative decision, without going through the courts, to financially penalise the company. | He said regulators in the UK could also take action against Rio Tinto by administrative decision, without going through the courts, to financially penalise the company. |
| Price said it was also noteworthy that news reports had mentioned the role of a whistleblower in the US, and Asic was keeping an eye on the whistleblower debate in Australia. | Price said it was also noteworthy that news reports had mentioned the role of a whistleblower in the US, and Asic was keeping an eye on the whistleblower debate in Australia. |
| Medcraft said: “So basically it’s one of those cases, think globally act locally, and try to get the best outcome on an overall basis.” | Medcraft said: “So basically it’s one of those cases, think globally act locally, and try to get the best outcome on an overall basis.” |
| Rio Tinto | |
| Mining | |
| Business (Australia) | |
| Mozambique | |
| Africa | |
| news | |
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