U.S. judge says SEC may pursue Rio Tinto fraud case

NEW YORK (Reuters) - A U.S. judge on Monday rejected Rio Tinto Plc's bid to dismiss a Securities and Exchange Commission lawsuit accusing the Anglo-Australian mining company of civil fraud in its handling of a failed investment in a Mozambique coal project. U.S.

Reuters March 19, 2019 00:05:55 IST
U.S. judge says SEC may pursue Rio Tinto fraud case

US judge says SEC may pursue Rio Tinto fraud case

NEW YORK (Reuters) - A U.S. judge on Monday rejected Rio Tinto Plc's bid to dismiss a Securities and Exchange Commission lawsuit accusing the Anglo-Australian mining company of civil fraud in its handling of a failed investment in a Mozambique coal project.

U.S. District Judge Analisa Torres in Manhattan said the SEC may pursue some of its claims in the October 2017 lawsuit, which also charged former Chief Executive Officer Tom Albanese and former Chief Financial Officer Guy Elliott with fraud.

The SEC accused the defendants of inflating the value of Mozambique coal assets that Rio Tinto bought in 2011 for $3.7 billion, through a takeover of the former Riversdale Mining.

By waiting until January 2013 to take a more than $3 billion writedown, Rio Tinto was able to make its balance sheet look better and raise more than $5.5 billion from U.S. investors unaware of problems with the assets, the SEC said.

Rio Tinto eventually sold the assets in late 2014, for just $50 million.

Lawyers for the defendants had no immediate comment or did not immediately respond to requests for comment. The SEC did not immediately respond to a similar request.

In court papers, the defendants had argued that the SEC did not establish fraud and was "plainly wrong" to conclude they needed to take a big writedown sooner, given the complexities of the accounting procedures and valuation assessments.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and Bill Berkrot)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.