BHP Billiton investors sue in U.S. over Brazil dam disaster
By Jonathan Stempel
NEW YORK Feb 24 (Reuters) - BHP Billiton Ltd was sued in the United States by investors who accused the Anglo-Australian mining company of fraudulently overstating its ability to manage safety risks prior to November's fatal dam burst at a Brazilian mine it co-owned and operated.
In a complaint filed on Wednesday in the U.S. District Court in Manhattan, investors led by the Jackson County Employees' Retirement System in Michigan said BHP inflated the price of its American depositary receipts by ignoring safety risks and overstating its commitment to safety before the disaster.
Four BHP officials were also sued, including Chief Executive Andrew Mackenzie and Chairman Jac Nasser.
Wednesday's lawsuit follows the Nov. 5, 2015 dam burst in Minas Gerais, Brazil's main mining state, at the mine run by Samarco, a joint venture between BHP and Brazil's Vale SA .
The burst unleashed huge quantities of mud and waste that destroyed a nearby village and killed at least 17 people, in Brazil's worst environmental disaster.
On Nov. 30, Brazil sued BHP and Vale for 20 billion reals (US$5.05 billion) of damages.
The price of BHP's ADRs closed that day 20 percent below where they traded before the dam burst, and the complaint said BHP should compensate ADR investors for that decline.
"Defendants knew or recklessly disregarded the precarious condition of the Fundão dam and Samarco's tailings facilities," causing harm to investors when the truth came out, it said. Continued...