Two high profile resource business decision-makers at a global mining company are updating their CVs after being stood down over an alleged US$10.5 million in overseas payments.
Rio Tinto energy and minerals chief executive Alan Davies (pictured) and legal and regulatory affairs group executive Debra Valentine allegedly made the payments to a consultant in exchange for advisory services linked to the US$20 billion Simandou Iron Ore Project in Guinea.
The Rio Tinto board reviewed an internal investigation into the contractual arrangements with the consultant dating back to 2011. The board found the executives failed to maintain “standards expected of them” under the corporate global code of conduct, prompting the decision to terminate the executives’ contracts.
“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,” the company says.
“As previously announced, Rio Tinto contacted the regulatory authorities in the United Kingdom, Australia and the United States about the matter and intends to fully cooperate with any subsequent inquiries.”
Davies has rejected the dismissal, telling the media there are “no grounds for the termination” and he has no choice but to “take the strongest possible legal action in response”.
Nevertheless, Davies will be replaced by Bold Baatar, who will join the executive committee as the next energy and minerals chief executive.
Bold held a number of senior investment banking roles with JP Morgan before taking on chief executive positions with a gold mining company and a diversified investment management business in Mongolia. He joined Rio Tinto in 2013 as copper international operations president, and is managing director of marine and vice president iron ore sales and marketing.
“Appointing Bold to run our Energy & Minerals business will add a fresh perspective to the product group. Bold brings broad international and executive experience in a wide range of commercial disciplines. He has a proven track record and will be a great addition to our ExCo, particularly with his strong strategic approach and acute understanding of Asia,” Rio Tinto chief executive J-S Jacques says.
Chief financial officer Chris Lynch has temporarily assumed accountability for the corporate legal and regulatory affairs role.
Recruitment is underway for the next chief legal counsel.