CHINA/FILE: China formally arrests four Rio Tinto employees

Record ID: 492644

  • Title: CHINA/FILE: China formally arrests four Rio Tinto employees
  • Date: 13th August 2009
  • Summary: JOURNALISTS BEIJING, CHINA (AUGUST 12, 2009) (REUTERS) HAO JINSONG, SENIOR LAWYER AT GIANT&GOAL LAW FIRM, TALKING TO JOURNALIST HAO'S HANDS (SOUNDBITE) (Mandarin) HAO JINSONG, SENIOR LAWYER AT GIANT&GOAL LAW FIRM, SAYING: "A just sentence talked about by the Chinese government doesn't necessarily mean a light sentence. For the government, a tougher sentence could also be a just sentence as long as it is passed within the legal period of sentencing. An ex-official from the State Secrecy Bureau posted some articles on the bureau's website, saying the Rio Tinto case has caused an economic loss up to 700 billion (RMB) ($102 billion). I think these articles were released under the authorisation of the government, which signals a tougher sentence for the Rio Tinto case."
  • Embargoed: 28th August 2009 13:00
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  • Topics: Crime / Law Enforcement,Information
  • Reuters ID: LVAE8HOJPEIMVDNQCQF5CRHRZLCZ
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  • Story Text: China formally arrests four employees of mining giant Rio Tinto on suspicion of violating commercial secrets and bribery.
    Chinese prosecutors have formally arrested four employees of Anglo-Australian mining giant Rio Tinto on suspicion of obtaining commercial secrets and bribery, state media reported on Wednesday (August 12).
    Australian Stern Hu and three Chinese staff of the world's second-biggest iron ore producer are suspected of "using improper means to obtain commercial secrets about our country's steel businesses," China's central television (CCTV) cited prosecutors in Shanghai as saying.
    The CCTV report said the state prosecutors also approved their arrest on suspicion of "commercial bribery," a charge that can bring jail terms of up to 3 years, or 7 years in "especially serious" cases.
    It did not mention accusations of stealing state secrets, a sweeping charge raised in earlier reports, which could attract tougher sentences.
    "(China is) a country under the rule of law. We believe the Chinese judicial system will give a just sentence to this case based on facts and Chinese laws. There is no doubt about that," Chinese vice Minister of Commerce told a news conference on Wednesday.
    Hu, Rio Tinto's head of iron ore marketing in China, and the three other members of the Shanghai-based team were detained on July 5.
    Hu was accused of obtaining and passing on the Chinese steel industry's negotiating position in protracted iron ore price talks, sources have said. Iron ore is used to make steel.
    Hao Jinsong, a senior lawyer at Giant&Goal Law Firm in Beijing, expected the sentence would be tough.
    "A just sentence talked about by the Chinese government doesn't necessarily mean a light sentence. For the government, a tougher sentence could also be a just sentence as long as it is passed within the legal period of sentencing. An ex-official from the State Secrets Agency posted some articles on the bureau's website, saying the Rio Tinto case has caused an economic loss up to 700 billion (RMB) ($102 billion U.S. dollar). I think these articles were released under the authorisation of the government, which signals a tough sentence for the Rio Tinto case," said Hao.
    The figure of $102 billion appeared to derive from an academic assessment of how much more the steel industry has paid for iron ore since 2003, but that higher cost was more than offset by rising steel prices as China's economy grew.
    The Rio case has cast a shadow over Australia-China trade, worth $53 billion in two-way terms in 2008.
    Rio Tinto's shares have fallen about 5 percent from their close at the end of last week of A$60.57, before a weekend report from China that said the company had been spying for six years.
    The shares stood at A$57.35 at 0041 GMT on Wednesday.
    Rio Tinto declined to comment when contacted about the arrests. Rio has previously said the four did nothing wrong.
    Australia's government had not been informed of the arrests, a Foreign Ministry spokeswoman said.
    Prime Minister Kevin Rudd has warned China it had significant economic interests at stake in detaining Hu and that the world was watching how it handled a case that has highlighted the risks of doing business in the world's third-largest economy.
    However, Australia has insisted the case would not harm trade relations with its biggest trade partner.
    Australia exported $15 billion worth of iron ore to China in 2008, accounting for 41 percent of China's iron ore imports in that period.
    The official Xinhua news agency reported that in recent days Chinese steel executives had been formally arrested on suspicion of "providing commercial secrets" to Hu.
    The Australian government on Tuesday (August 11) dismissed the Chinese report accusing Rio of overcharging and spying on Chinese steel mills, saying the report had not been officially sanctioned.
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