Rio Tinto and former bosses face fraud charges over Mozambican coal calamity
Melbourne — Rio Tinto’s calamitous $3.7bn coal deal in Mozambique involving a plan to barge the fuel hundreds of kilometres down the Zambezi River keeps coming back to haunt the world’s second-biggest miner — already grappling with another African misadventure. US authorities filed fraud charges against London-based Rio, former CEO Tom Albanese and ex-chief financial officer Guy Elliott, claiming they inflated the value of the coal assets acquired in 2011. The unit was sold for $50m in 2014 following impairments of about $2.9bn in 2013 and $470m a year later. Rio raised $5.5bn from US debt investors, including $3bn after May 2012, when executives had told Albanese and Elliott that the Mozambique unit was likely worth negative $680m, according to a Securities and Exchange Commission (SEC) complaint filed in federal court in New York. "Rio Tinto intends to vigorously defend itself against these allegations," the company said in an e-mailed statement on the SEC charges. Albanese, Rio’s...
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