China jails Rio Tinto employees

Shanghai court hands mining firm employees “tough” sentences over bribery allegations.

The trial has been seen as a signal that China is subjecting foreign companies to close scrutiny [AFP]
The trial has been seen as a signal that China is subjecting foreign companies to close scrutiny [AFP]

Rio, which initially staunchly defended its staff but recently urged the court to handle the case in a quick and transparent way, said it would sack all four employees.

“We have been informed of the clear evidence presented in court that showed beyond doubt that the four convicted employees had accepted bribes,” Sam Walsh, the chief executive, said.

‘Hefty sentences’ 

Al Jazeera’s Harry Fawcett, speaking outside the court in Shanghai, said suspicions that there might have been some leniency had been quashed because “[they] are fairly hefty sentences”.

“The heftiest sentence has gone to Wang Yong,” he said.

“Interestingly, he was the only one of the four who admitted taking money – $9m from a senior Chinese steel official – but he didn’t say it was bribery according to his lawyer – merely that it was a loan of some kind.

“Whether there’s any correlation between that and the fact that he’s got the heftiest sentence … we don’t know.”

The politically-sensitive trial ended last Wednesday after Hu and his Chinese colleagues pleaded guilty to receiving bribes during iron ore price negotiations with China last year.

Australian officials said the sentences were tough “by any measure” [AFP]

They were also charged with the theft of commercial secrets, with the hearings on those allegations held in closed court.

Australian consular officials and foreign journalists were barred from proceedings.

Few details of the allegations against China-born Australian citizen Hu and his accomplices have been released.

The four men were formally arrested in August and have not been allowed to make any public comment.

Giles Chance, a professor of management at Peking University, said the court verdict came as a “significant suprise” to foreign companies operating in China.

“I think it’s going to be a message from China to foreign companies that if Chinese or foreign nationals are found involved in acts of corruption or bribery in China, then they better watch out,” he told Al Jazeera.

“It’s going to be quite a shock and foreign companies are going to have to look carefully at their procedures and how they go about doing business both in China and else where.”

But Chance added that the sentence would not have “significant medium-term impact” on foreigners investing in China.

“I think that it’s the money that really drives these [investment] decisions and these sort of activities, wherever they occur, are just factored into the overall decisions,” he said.

“Having said that, an environment of transparency is very helpful to overseas investment.”

Kickback accusations

On the first day of hearings last Monday, the four executives pleaded guilty to charges of taking bribes, but defence lawyers said the amounts taken were far smaller than the sums prosecutors alleged.

Prosecutors said the bribes reached 6.46 million yuan ($946,300) for Hu, and 75 million yuan – including $9m from steel tycoon Du Shuanghua – in the case of Wang, thehead of a separate iron ore sales team.

Parts of the trial were closed to Australian consular officials [Reuters]

Liu, who was accused of taking the lowest amount of kickbacks among the four, was the only one to plead guilty to infringing commercial secrets.

The admissions of bribe-taking have been seen as a blow for Rio Tinto, one of the world’s largest miners, at a time when it seeking to restore good relations with China.

The case is seen by many working in China as a signal that the government is subjecting foreign companies to increasingly close scrutiny, raising the risks of running foul of secrecy laws that are, themselves secret.

The four employees were arrested shortly after the collapse of tense iron-ore contract talks, and just weeks after Rio snubbed a major investment by state-run Chinalco.

The Shanghai court will also rule on a second case on Monday, that of Tan Yixin, an executive at Shougang Corp, China’s eighth-largest steel mill, who was detained around the same time as the four Rio employees.

Source: Al Jazeera, News Agencies


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