Rio Directed to Pay Ex-CEO A$6.8 Million Withheld Amid Probes
Rio Directed to Pay Ex-CEO A$6.8 Million Withheld Amid Probes
(Bloomberg) -- Rio Tinto Group will pay former Chief Executive Officer Sam Walsh about A$6.8 million ($4.4 million) in bonuses withheld amid probes related to an African iron ore project, despite the miner’s concerns that the investigations remain in progress.
London-based Rio will release Walsh’s full entitlements of short-and-long term bonuses following an independent dispute resolution process, the former executive said Thursday in a statement. The process was triggered after the two sides couldn’t reach agreement to extend deferral of the incentive plan awards, the company said in its own statement.
Walsh retired from his post in July 2016, months before Rio announced that it had alerted authorities, including the U.S. Department of Justice and the U.K.’s Serious Fraud Office, about payments related to the Simandou iron ore project in Guinea.
Investigations are centered on a $10.5 million payment to an external consultant in 2011 for assisting on negotiations with Guinea’s President Alpha Conde.
Rio believed an extension to a 2017 agreement to delay the bonus payments “was appropriate given that the regulatory investigations in relation to the Simandou matter are ongoing,” though agreed to comply with the outcome of the dispute process, the company said Thursday in its statement.
Walsh, who was head of iron ore at the time the payment was made, has previously said that he always acted lawfully. The resolution of the dispute process in his favor showed “there is no basis for those awards to be further deferred,” he said Thursday. Rio in 2016 terminated the contracts of two executives in relation to the Guinea inquiry.
Rio is continuing to cooperate with international authorities in their investigations into the consultant payments, the company said last month in an annual report.
Meanwhile, Simandou is moving closer to potential development. China is poised to give the go-ahead for some of its biggest state-owned companies to back the project, people familiar with the matter said this month.
To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.net
To contact the editors responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net, Keith Gosman
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