According to the law firm press release, Rio Tinto is incorporated in the United Kingdom (“U.K.”), and its ADRs are listed on the New York Stock Exchange (“NYSE”). The Company, a mining and metals company, finds, mines, processes, and markets mineral resources. It has operations in Australia, North America, Asia, Europe, Africa, and South America.
During August 2011, Rio Tinto completed its purchase of certain coal assets in Mozambique for approximately $3.7 billion (net of cash acquired at acquisition). This business became known as Rio Tinto Coal Mozambique, or “RTCM.”
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding RTCM’s true value.
More specifically, the complaint alleges: (a) within months of the purchase, now-former senior executives knew of material problems adversely affecting RTCM’s multi-billion dollar publicly reported valuation; (b) as time passed, the same senior executives knew of additional problems and events that, under applicable accounting rules, required an impairment analysis of RTCM and reductions in its reported valuation; (c) instead of timely performing the impairment analysis, these executives thwarted it and continued to tout RTCM’s value to investors; (d) when a concerned employee outside the normal financial control function discovered or suspected the senior executives concealed RTCM’s negative valuation from Rio Tinto’s Board of Directors, he bypassed them and directly alerted the Chairman, who ordered an investigation into RTCM’s true value; (e) on January 15, 2013, less than a year and a half after the purchase, the Board determined RTCM was severely impaired and should be written down by billions of dollars to $611 million; and (f) the impact of this writedown was reported to investors in Rio Tinto’s financial report on Form 6-K filed with the SEC on February 15, 2013.
As a result of this news and other disclosures, Rio Tinto’s ADR price declined.
On May 18, 2018, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on September 25.