United States SEC Fines $115 Billion Mining Giant Rio Tinto $15 Million for Corruption & Bribery, Hired French Investment Banker for $10.5 Million Who Offered at Least $822,000 Improper Payments to Government Official to Secure Mining Rights
9th March 2023 | Hong Kong
The United States Securities & Exchange Commission (SEC) has charged and fined $115 billion (Market Value 9/3/23) mining giant Rio Tinto $15 million for corruption & bribery, hiring a French investment banker for $10.5 million who offered at least $822,000 of improper payments to government official (Guinea) to secure mining rights. United States SEC: “The SEC’s order finds that, in July 2011, Rio Tinto hired a French investment banker and close friend of a former senior Guinean government official as a consultant to help the company retain its mining rights in the Simandou mountain region in Guinea. The consultant began working on behalf of Rio Tinto without a written agreement defining the scope of his services or deliverables. Eventually the mining rights were retained, and the consultant was paid $10.5 million for his services, which Rio Tinto never verified. The SEC’s investigation uncovered that the consultant, acting as Rio Tinto’s agent, offered and attempted to make an improper payment of at least $822,000 to a Guinean government official in connection with the consultant’s efforts to help Rio Tinto retain its mining rights. Furthermore, none of the payments to the consultant was accurately reflected in Rio Tinto’s books and records, and the company failed to have sufficient internal accounting controls in place to detect or prevent the misconduct. The mine has not been developed by Rio Tinto.” See below for United States statement.
“ United States SEC Fines $115 Billion Mining Giant Rio Tinto $15 Million for Corruption & Bribery, Hired French Investment Banker for $10.5 Million Who Offered at Least $822,000 Improper Payments to Government Official to Secure Mining Rights “
Rio Tinto – Rio Tinto has today resolved a previously self-disclosed investigation by the U.S. Securities and Exchange Commission (SEC) into certain contractual payments made to a former consultant over a decade ago in 2011, relating to the Simandou project in the Republic of Guinea. Without admitting to or denying the SEC’s findings, Rio Tinto has agreed to pay a $15 million civil penalty for violations of the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA).
In connection with the settlement, Dominic Barton, Chairman of Rio Tinto said: “We are glad to have resolved this matter related to events that occurred over a decade ago on appropriate and reasonable terms. When Rio became aware of the issue, an internal investigation was immediately launched, and we proactively notified the appropriate authorities. “Since becoming aware, Rio Tinto has taken significant actions to enhance our compliance programme based on best practices. Under current leadership we are taking action to build a culture guided by our values of care, courage and curiosity; an environment where every team member feels comfortable to speak up if something is not right. We remain committed to conducting business to the highest standards of integrity, and ensuring that our projects benefit communities, host governments, shareholders, and customers.” This announcement is authorised for release to the market by Steve Allen, Rio Tinto’s Group Company Secretary.
United States SEC Fines $115 Billion Mining Giant Rio Tinto $15 Million for Corruption & Bribery
United States SEC Charges Rio Tinto plc with Bribery Controls Failures
6th March 2023 – The Securities and Exchange Commission today announced charges against global mining and metals company, Rio Tinto plc, for violations of the Foreign Corrupt Practices Act (FCPA) arising out of a bribery scheme involving a consultant in Guinea. The company has agreed to pay a $15 million civil penalty to settle the SEC’s charges.
The SEC’s order finds that, in July 2011, Rio Tinto hired a French investment banker and close friend of a former senior Guinean government official as a consultant to help the company retain its mining rights in the Simandou mountain region in Guinea. The consultant began working on behalf of Rio Tinto without a written agreement defining the scope of his services or deliverables. Eventually the mining rights were retained, and the consultant was paid $10.5 million for his services, which Rio Tinto never verified. The SEC’s investigation uncovered that the consultant, acting as Rio Tinto’s agent, offered and attempted to make an improper payment of at least $822,000 to a Guinean government official in connection with the consultant’s efforts to help Rio Tinto retain its mining rights. Furthermore, none of the payments to the consultant was accurately reflected in Rio Tinto’s books and records, and the company failed to have sufficient internal accounting controls in place to detect or prevent the misconduct. The mine has not been developed by Rio Tinto.
“Even well-designed controls need committed managers to be effective,” said Charles E. Cain, Chief of the SEC Division of Enforcement’s FCPA Unit. “Here, deficient controls were no match for managers determined to hire a consultant whose only ostensible qualification was a personal relationship with a senior government official.”
Rio Tinto consented to the SEC’s order without admitting or denying the findings that it violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934 and agreed to pay a $15 million civil penalty.
The SEC’s investigation was conducted by Sana Muttalib and was supervised by Ansu N. Banerjee. The SEC appreciates the assistance of Australian Securities & Investments Commission, the Australian Federal Police, and the United Kingdom Serious Fraud Office.
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