By Rhiannon Hoyle
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 2, 2018).
SYDNEY -- Australia's corporate regulator has widened legal action against Rio Tinto Ltd. and two of the company's former executives, pursuing allegations the mining giant was late in writing down a troubled African investment.
Rio Tinto has come under scrutiny from officials in the U.S., U.K. and Australia over the handling of coal assets it purchased in Mozambique for about $4 billion in 2011, but which faced substantial writedowns and were later sold at just $50 million, a fraction of that price.
The Australian Securities and Investments Commission said Tuesday that it's lodged new allegations against Rio Tinto, its former Chief Executive Thomas Albanese, and former Chief Financial Officer Guy Elliott posing that the assets should have been impaired in the company's 2012 interim financial statements.
"By not doing so... ASIC alleges Rio Tinto also engaged in misleading or deceptive conduct," the regulator said.
Mr. Albanese left Rio Tinto -- the world's second-largest listed miner -- in 2013, as the company announced a global write-down of $14 billion, including some $3 billion in Mozambique.
"The charges are wholly unwarranted, and Rio Tinto intends to vigorously defend itself, and is confident that ASIC's allegations will be rejected once all the facts are considered in court," a Rio Tinto spokesman said Tuesday.
U.S. officials in October alleged that Rio Tinto had misled investors about the value of its Mozambique assets.
A Securities and Exchange Commission suit alleges the company continued to value its mining assets in Mozambique at more than $3 billion after an internal assessment put their worth at negative $680 million.
The SEC also alleges that Messrs. Albanese and Elliott didn't disclose the problems with the Mozambique assets because they had already written down the value of Rio Tinto's Alcan aluminum division and feared the market's reaction to another unsuccessful deal.
They did this despite knowing the Mozambique coal business "was a lemon, " according to a recent U.S. court filing.
The allegations also led Mr. Elliott to resign from the board of Royal Dutch Shell PLC.
Both men have disputed the U.S. allegations. Neither could immediately be reached on Tuesday.
The Australian regulator had said in March that it would bring action against the miner and the executives,alleging they had misrepresented the reserves and resources of the Mozambique coal assets.
Former Rio Tinto chairman Jan du Plessis, who served from 2009 until this March, recently called the Mozambique investment "undoubtedly a low point during my tenure."
Rachel Pannett contributed to this article.
Write to Rhiannon Hoyle at [email protected]