The Australian Securities and Investments Commission (ASIC) has commenced legal proceedings in the Federal Court in Sydney against Rio Tinto Limited (RTL) and its former Chief Executive Officer, Mr Thomas Albanese, and its former Chief Financial Officer, Mr Guy Elliott. The proceedings relate to statements which ASIC alleges were misleading or deceptive contained in the RTL annual report for 2011 which was signed on 5 March 2012 and published on 16 March 2012.
In December 2010, RTL announced a takeover offer for Riversdale Mining Limited (ASX:RIV) (Riversdale) which was completed in August 2011 at a total cost of over US$4 billion. Following the acquisition RTL delisted Riversdale and renamed it Rio Tinto Coal Mozambique (RTCM).
ASIC alleges that RTL 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. Further, by allowing RTL 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 RTL.
ASIC is seeking declarations that RTL contravened s1041H of the Corporations Act 2001 (Cth) (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’s investigations are continuing in relation to the circumstances surrounding the impairment of RTCM.