Rio Tinto said Oct. 17 that it will vigorously defend the charges brought against the company and its former executives by the U.S. SEC regarding the disclosures and timing of the impairment on the coal assets in Mozambique.
The SEC alleged in a civil complaint filed in the District Court for the Southern District of New York that the miner committed fraud by not accurately disclosing the value of coal assets and not impairing the assets in its 2011 yearly accounts released in February 2012 or its interim results disclosed in August 2012.
Rio Tinto's former CEO Thomas Albanese and former CFO Guy Elliott are accused of inflating the value of coal assets acquired in Mozambique for US$3.7 billion, which were sold a few years later for US$50 million.
The company noted that the claims are unwarranted, and when all the facts are considered by the court, or if necessary by a jury, these claims will be rejected.
Rio Tinto noted that it reached a settlement with the U.K.'s Financial Conduct Authority, which imposed a financial penalty on the miner of around £27.4 million for breaching the FCA's disclosure and transparency rules in connection with an impairment review for its 2012 interim results. The authority made no findings of fraud or of any systemic or widespread failure by Rio Tinto.
The Australian Securities and Investments Commission is also reviewing the impairment over the Mozambique assets.
Earlier in 2013, Albanese stepped down as the miner recorded a write-down of about US$3 billion for the coal assets.