Australian Securities and Investments Commission v Rio Tinto Limited (No 2)
Citation: [2022] FCA 184
At a glance
- Penalty
- $750,000
What happened
The Australian Securities and Investments Commission (ASIC) brought proceedings against Rio Tinto Limited, the Respondent, and Guy Elliott. The case concerned whether Rio Tinto breached its continuous disclosure obligations under the Corporations Act. Rio Tinto admitted to one contravention: failing to notify the ASX about information concerning their coal projects in Mozambique between December 2012 and January 2013. This 'Orebody Information' revealed a reduction in expected recoverable coal volumes and diminished confidence in economic extraction, impacting the viability of the projects. The company had previously made public statements portraying these projects as highly prospective and world-class.
What was decided
Rio Tinto Limited admitted to breaching section 674(2) of the Corporations Act by failing to disclose material information about its Mozambique coal projects to the ASX. The court declared this contravention. Rio Tinto was ordered to pay a pecuniary penalty of $750,000 to the Commonwealth and cover ASIC’s legal costs. Proceedings against the Respondent and Guy Elliott were dismissed with no order as to costs.
What it means for employers
Employers, particularly those listed on stock exchanges, must ensure timely disclosure of material information that could affect share prices. This includes promptly assessing and releasing accurate information about projects, even if it contradicts previous public statements. Companies should review their internal processes for identifying and disclosing relevant information to avoid similar penalties.
What it means for employees
Employees with access to material information affecting a company's value have a responsibility to ensure that information is disclosed appropriately. This case highlights the importance of understanding continuous disclosure obligations and seeking clarification if unsure about reporting requirements. Failure to do so can lead to legal consequences for both the company and potentially individuals involved.
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This summary was drafted from the published decision and reviewed before publishing. It is general information, not legal advice. For your specific situation, speak to the Fair Work Ombudsman (13 13 94) or a qualified lawyer. About these summaries & corrections →