Rio Tinto (RIO) is in for a brawl after sacking two senior executives yesterday over the $US10.5 million payment in connection with the Simandou iron ore prospect in Guinea in West Africa. Rio said yesterday morning it had “today terminated the contracts of Energy & Minerals chief executive Alan Davies and Legal & Regulatory Affairs Group executive Debra Valentine.”
Mr Davies said in a statement issued later in the day that he would fight his dismissal.
In its statement Rio said that its "board reviewed the findings to date of an internal investigation into 2011 contractual arrangements with a consultant who provided advisory services on the Simandou project in Guinea."
"The board’s decision does not pre-judge the course of any external inquiries into this matter. However, the board concluded that the executives failed to maintain the standards expected of them under our global code of conduct. The way we work, in the circumstances, the board terminated the contracts of both executives.
"In accordance with contract termination, neither executive will be eligible for any short-term incentive plan awards for 2016. Rio Tinto will also cancel all unvested incentive plan awards from previous years,” Rio said.
Mr Davies said he would take legal action against Rio Tinto. He was suspended last week after the miner said it became aware of emails from 2011 relating to $US10.5m in contractual payments made to a consultant for services on its Simandou iron ore project in Guinea.
He said he “has been left with no option but to take the strongest possible legal action in response” to his dismissal. Mr Davies said he was surprised by the termination and that he was not given the opportunity to respond to the allegations. He also claimed that “there are no grounds for the termination of my employment.”
"It is with great surprise and disappointment that I have been advised of the termination of my employment by Rio Tinto. I have not been privy to Rio Tinto’s internal investigation report, nor have I had any evidence of the reasons for my termination of my employment given.
"There are no grounds for the termination of my employment. Rio Tinto has made no effort to abide by due process or to respect my rights as an employee and it has given me no opportunity to answer any allegations."
"This treatment of me and my past and recent colleagues is totally at variance with the values and behaviours of the company to which I have devoted my professional life. “My rights are fully reserved, and I have been left with no option but to take the strongest possible legal action in response.”
Rio shares yesterday rose 0.9% to end at $US57.47.
