SEC Charges Rio Tinto plc with Bribery Controls Failures
Rio Tinto plc agreed to pay a $15 million civil penalty to settle SEC charges of violating the Foreign Corrupt Practices Act through a bribery scheme involving a consultant in Guinea.
Rio Tinto plc was charged with violating the Foreign Corrupt Practices Act for bribing a Guinean government official through a consultant with close ties to a senior official. The company paid the consultant $10.5 million without a written agreement or proper due diligence, and failed to maintain adequate internal controls. Rio Tinto agreed to pay a $15 million civil penalty to settle the charges without admitting or denying the allegations.
The Securities and Exchange Commission charged Rio Tinto plc with violating the Foreign Corrupt Practices Act for bribing a Guinean government official through a consultant with close ties to a senior official. The consultant was hired in 2011 to help Rio Tinto retain its mining rights in the Simandou region of Guinea, and was paid $10.5 million without a written agreement or proper due diligence. The consultant attempted to make at least $822,000 in improper payments to a Guinean official, none of which were properly recorded. Rio Tinto failed to maintain adequate internal controls, despite knowing the consultant's only qualification was his personal relationship with a government figure. The company agreed to pay a $15 million civil penalty to settle the charges without admitting or denying the allegations. The mine in question remains undeveloped. The SEC credited cooperation from Australian and UK authorities in its investigation. The SEC's investigation was conducted by Sana Muttalib and supervised by Ansu N. Banerjee.
Exhibits & Attached Documents (1)
Extracted insights
- $15.00M $15 million $10M–$100M
- $10.50M $10.5 million $10M–$100M
- $822K $822,000 $100K–$1M
- person ansu n. banerjee
- person french investment banker
- person rio tinto
- company Rio Tinto Plc
- person sana muttalib
- agency sec investigation
- agency sec order
- agency Securities and Exchange Commission
- person sufficient internal accounting controls
- SEC Announced Charges Against Rio Tinto Plc
- Rio Tinto Plc Violated FCPA
- Rio Tinto Plc Agreed To Pay $15 Million Civil Penalty
- Rio Tinto Hired French Investment Banker
- Consultant Was Paid $10.5 Million
- Consultant Offered $822,000 Improper Payment
- Rio Tinto Failed To Have Sufficient Internal Accounting Controls
- Rio Tinto Consented To SEC Order
- Sana Muttalib Conducted SEC Investigation
- Ansu N. Banerjee Supervised SEC Investigation
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.
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.