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US law firm files class suit against Rio Tinto over Mozambique coal
12:20 CAT | 24 Oct 2017
Bloomberg (File photo) / The Riversdale mine in Mozambique was bought by Rio Tinto for US$3.7 billion in 2001 and sold in October 2014 for just US$50 million.
An American law firm based in Seattle has filed a class action lawsuit against Rio Tinto over the mining giant’s failed investment in a Mozambique coal project which cost the mining giant billions of dollars.
The law firm Hagens Berman, which revealed the action on Monday, alleges defendants in the action made false and misleading statements and/or failed to disclose adverse information about the true value of Rio’s Mozambique coal investment made in 2011.
Rio acquired the coal assets forUS$3.7 billion but the company’s plans for coal mining in the African country hit major hurdles, the assets crumbled in value, and the miner sold them in October 2014 for just US$50 million.
Also named as defendants in the lawsuit are Rio Tinto’s former chief executive Tom Albanese and former chief financial officer Guy Elliott.
Hagens Berman, which describes itself as “a national investor-rights law firm”, has taken the action on behalf of purchasers of Rio Tinto plc American Depositary Receipts between October 23, 2012 and February 15, 2013.
The writ alleges: “Defendants’ wrongful conduct has inflicted significant damages on Rio Tinto investors.” The plaintiff is named as Anton Colbert.
“This action concerns a fraud previously unknown to investors and only recently revealed by the SEC (Securities and Exchange Commission) in its complaint filed on October 17, 2017,” the writ says.
By Darren Gray
Source: The Sydney Morning Herald
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