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China Convicts, Sentences 4 Rio Tinto Executives

  • Stephanie Ho

A Chinese court has handed down stiff prison terms to four executives of Australian mining corporation Rio Tinto, after convicting them of bribery and commercial spying.

Australian Consul-General Tom Connor was present when the sentence was read out Monday at a court in the city of Shanghai.

First on the list of sentences he read out was that of Chinese-Australian Stern Hu, who headed Rio Tinto's iron ore operations in China.

"On the charge of bribery, Mr. Stern Hu was sentenced to seven years jail, and an amount of 500,000 RMB [yuan - approx $75,000] has been confiscated," said Connor. "On the commercial secrets matter, he has been sentenced to five years in prison, and being given a fine of 500,000 RMB. The combined period of time he will have to serve in prison will be 10 years."

The stiffest sentence went to Rio Tinto staffer Wang Yong, a Chinese citizen sentenced to 14 years. Two other Chinese defendants received prison sentences totaling seven and eight years.

Australian Foreign Minister Stephen Smith expressed Canberra's dismay.

"On the bribery charge, this to me seems to be a very harsh sentence, and on the commercial secrets matter, because we have had no access to that part of the trial, there are I think serious unanswered questions which the international business community will want to continue to pursue with China," said Smith.

Australian diplomats were allowed to attend some of the three-day trial, but were not allowed to observe the closed-door testimony concerning commercial secrets.

The four men had all pleaded guilty to accepting some bribes, though some had denied stealing secrets. All four were detained in Shanghai last July.

Rio Tinto is one of the top suppliers of iron ore to China and a key industry negotiator in price talks with state-owned steel mills. The secrets the four employees were accused of obtaining were largely related to the annual price negotiations.

The company has fired the men because they accepted bribes. But it would not comment on the spying charges, because it has not seen any of the evidence.

The American Chamber of Commerce in China last week issued a survey that found growing pessimism among American companies doing business in China.

AmCham-China president Michael Barbalas said recent events, such as Rio Tinto's troubles, are not related to negative U.S. business sentiment, but also do not help it either.

"I think that the timing coming so close together is not the best," said Barbalas.

Lawyers for the four employees say the men are considering an appeal.