The Rio Tinto Limited (ASX: RIO) share price is hovering in negative territory today following a $750,000 penalty notice. This comes as the verdict from the Federal Court case was handed down to the mining giant for breaching its continuous disclosure obligations.
At the time of writing, the mining giant’s shares are swapping hands for $126.06, down 0.40%.
Rio Tinto agrees Federal Court result
Investors are sending the Rio Tinto share price lower during Monday afternoon following the decision to penalise Rio Tinto.
According to the Australian Securities and Investments Commission (ASIC) media release, the Federal Court found that Rio Tinto failed to disclose material information to the ASX between 21 December 2012 and 17 January 2013.
This relates to the mining assets held by Rio Tinto Coal Mozambique which overstated its coal reserves.
ASIC deputy chair, Sarah Court commented:
Rio Tinto had obligations to the market to keep it adequately informed about its mining projects overseas.
When Rio Tinto was aware of information that Rio Tinto Coal Mozambique was no longer economically viable as a long-life, large-scale, Tier 1 coking coal resource, the market should have been properly informed in a timely manner.
Rio Tinto agreed to resolve the settlement along with ASIC’s costs of the proceeding. The company filed joint penalty submissions.
Furthermore, ASIC’s claims against two former Rio Tinto officers, Mr Albanese and Mr Elliott, have been dismissed. Each of the parties will bear their own legal costs.
At the time, the maximum penalty for a single breach of continuous disclosure laws was $1 million. This has since been increased.
Despite today’s slight loss, it has been a solid year to date performance for Rio Tinto shares, gaining 25%.
Based on today’s price, Rio Tinto has a market capitalisation of $46.79 billion and approximately 371.22 million shares outstanding.
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