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Court throws out suit against Rio Tinto, former executives over Guinea payments

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Court throws out suit against Rio Tinto, former executives over Guinea payments

A District Court in New York threw out a class-action lawsuit against Rio Tinto and three former executives over the Guinea bribery scandal, accepting a motion to dismiss the legal proceedings, The Australian Financial Review reported Sept. 2.

The lawsuit was seeking damages for the loss of value in the company's American securities that followed the miner's 2016 decision to self-report to regulators in the U.S., the U.K. and Australia.

In November 2016, Rio Tinto suspended Energy & Minerals chief executive Alan Davies amid an ongoing investigation into payments totaling US$10.5 million made to a consultant providing "advisory services" on the Simandou iron ore project in Guinea. The company noted that it became aware of email correspondence from 2011 relating to the contractual payments on Aug. 29, 2016.

Davies was later sacked from the position. Meanwhile, Hugo Bague, the executive whose remit included the company's IT and systems, and Debra Valentine, head of legal affairs, also exited the company.

According to Judge Andrew Carter Jr., all three "were terminated in connection with the payment."

"When considering a motion to dismiss, the court accepts as true all factual allegations in the complaint and draws reasonable inferences in the plaintiff's favour," Judge Carter said in the verdict.

"The complaint must provide factual allegations sufficient 'to give the defendant fair notice of what the claim is and the ground upon which it rests'," according to the judgement.

The class actioneers were claiming that Rio Tinto and its executives knowingly made a payment that breached U.S. anti-bribery laws.

"The complaint simply does not state a claim that defendants had any indication that the payment was unlawful," the judge noted.