ASIC Takes Action Against Rio Tinto, Ex CEO and CFO For Misleading and Deceptive Conduct


Friday, March 02, 2018  07.23AM / ASIC 

The Australian Securities and Investments Commission (ASIC) has commenced legal proceedings in the Federal Court in Sydney today 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. ASIC will be making no further comment at this time.




Rio Tinto Limited is an Australian publicly listed company. Rio Tinto plc is a UK publicly listed company. RTL and Rio Tinto plc together operate a dual listed structure and the directors of both companies are the same. Both companies together form the Rio Tinto Group (Rio Tinto) and one set of financial statements are prepared.


In December 2010 Rio Tinto 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.


On 17 January 2013 Rio Tinto announced it expected to recognise a non-cash impairment charge of approximately US$14 billion (post tax) in its 2012 full year results which included approximately US$3 billion relating to RTCM. It was also announced that Mr Albanese had stepped down from his role as CEO.


In October 2017, the UK Financial Conduct Authority announced it had fined Rio Tinto plc £27,385,400 for breaching Transparency and Disclosure Rules by failing to carry out an impairment test and to recognise an impairment loss on the value of RTCM in the Rio Tinto 2012 half year report.


On the same date the US Securities and Exchange Commission commenced civil proceedings in the United States Federal Court in Manhattan against Rio Tinto, Mr Albanese and Mr Elliott for inflating the value of RTCM.


ASIC would like to thank the US SEC and the UK FCA for their assistance and collaboration in relation to this ongoing matter. 


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