Lawyers for Rio Tinto, former CEO Tom Albanese and former CFO Guy Elliott filed a consolidation motion to have recent U.S. SEC fraud charges against them dismissed, London's Financial Times reported March 6.
The charges were filed in October 2017, with the commission accusing the parties of violating the reporting, books and records, and internal controls provisions of federal securities laws related to an acquisition of coal assets in Mozambique, later consolidated under Rio Tinto Coal Mozambique.
According to lawyers for the defendants, the SEC alleges that Rio Tinto should have impaired the value of the Mozambique assets in question "within just 5 months (or at most 11 months) of the acquisition date," claiming the company and the two former executives knew of the assets' smaller value but hid this fact while, at the time, the company was raising money in the U.S. bond market.
"The SEC does not challenge here the amount of the impairment — only its timing," the lawyers said, adding that the impairment was done 17 months after the assets' acquisition, as soon as the company received "late-breaking ore-body test results" in 2012.
Recent reports said Rio Tinto wants its trade secrets to be kept away from the public eye during the investigation into the fraud allegations. Also recently, Australian regulators started legal proceedings against Rio Tinto, Albanese and Elliott over the same transaction in Mozambique.
