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The humiliation continues worldwide for BHP Billiton Rio Tinto
As reported by the NYTimes.com in USofA.|
Bribing is nothing unusual in USofA, but on this scale by a resource monopoly, it catches the world's attention.
Wie du mir, so ich dir.
Stiff Sentences Given in Rio Tinto Case
By DAVID BARBOZA
Published: March 29, 2010
SHANGHAI — Four employees of the British-Australian mining giant Rio Tinto, including an Australian citizen, were found guilty by a Chinese court on Monday of accepting millions of dollars in bribes and stealing commercial secrets.
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Qilai Shen/Bloomberg News
Tom Connor, Australia’s consul general in Shanghai, briefs the press on the verdict in the Rio Tinto case outside the Shanghai No. 1 People’s Intermediate Court on Monday.
They were sentenced to between 7 and 14 years in prison and ordered to pay hundreds of thousands of dollars in fines, yielding one the stiffest sentences ever handed down against a high-ranking executive working for a multinational company here.
The case heightened the fears of foreign investors doing business here because the four were initially detained on espionage charges, fueling concerns that the prosecution was politically motivated, intended to punish Rio Tinto for its clashes with Chinese companies.
(Cestmoi: And what are these foreign investors looking for? A laissez faire free market where you are allowed to bribe your way to the top?)
Until the verdict, Rio Tinto — one of the world’s biggest producers of iron ore — had strongly defended its employees. But the company issued a statement late Monday saying it had decided to immediately fire the four employees, describing the evidence released during the trial that they had accepted about $13.5 million in bribes as “beyond doubt.”
The verdict, which comes shortly after Google decided to pull its search engine out of Beijing, appears to be the latest indication that China is taking a harder line with foreign companies doing business here.
Rio Tinto was not charged in the case, but in announcing its verdict Monday the court essentially accused the company of using stolen information to harm China’s economic interests, costing about 20 of this country’s steel mills an extra $150 million last year alone.
Between 2003 and 2009, the court alleged that the four defendants used “improper means” to gain information that allowed Rio Tinto to “jack up the price that China paid” for its iron ore imports.
“Even after the trial, we do not know most of the facts,” said Jerome A. Cohen, a professor at New York University and an expert in China’s legal system. “It does seem clear, however, that the prosecution was related to the iron ore negotiations.”
Stern Hu, the Australian citizen who served as Rio Tinto’s general manager in Shanghai and whom the Australian government fought for the right to a fair trial, eventually pleaded guilty and was sentenced to 7 years in prison for bribery and five years for stealing business secrets. The court reduced his sentence to 10 years in prison, but it was still unusually long for a foreign executive.
After he and the three other employees confessed to accepting bribes — not paying them, as initial accounts of the case in China’s state-run news media suggested — a major question loomed: Would prosecutors also pursue the Chinese companies that funneled the money to them?
The Shanghai No. 1 Intermediate People’s Court partially answered that question on Monday, announcing that it would soon charge at least two Chinese steel industry officials with passing trade secrets to Rio Tinto.
The verdict is almost certain to deepen diplomatic tensions between Australia and China over the handling of the case and cast a pall over Rio Tinto’s iron ore negotiations here.
Rio Tinto is one of China’s biggest suppliers, helping this country import tens of billions of dollars worth of iron ore every year — a vital component for steel that is fueling this booming economy.
Following the verdict, Australia’s foreign minister, Stephen Smith, called Mr. Hu’s seven year sentence on bribery charges “very harsh,” according to the Associated Press.
Rio Tinto released a statement saying it could not comment on the trade secrets charges because it had not studied the evidence and that part of the trial was closed to the public. But the company said that by accepting huge bribes its employees had engaged in “deplorable behavior” that is clearly at odds with the company’s ethical culture.
(Cestmoi: Really? Then tell us, what criteria did BHP Rio used to select and appoint these executives?)
Rio Tinto said that an internal investigation following the arrests had found no evidence of wrongdoing. The company now believes the Shanghai employees acted “wholly outside our systems.”
(Cestmoi: You are telling me BHP Rio vet, select and appoint executives who would wholly work outside the systems? Wonder what the office politics is like with these people.)
At a three-day trial that took place here early last week, the four employees all pleaded guilty to accepting some bribes, though several of the men denied stealing commercial secrets, according to lawyers involved in the case.
In addition to Stern Hu, three Chinese colleagues were also charged with taking bribes and stealing commercial secrets — Wang Yong, Ge Minqiang and Liu Caikui. Mr. Wang received 14 years in prison, Mr. Ge received 8 years and Mr. Liu got 7 years.
The four men were initially arrested last July on suspicions of espionage and stealing state secrets from Chinese state-owned steel companies. But after protests from Australian officials and foreign executives about the seriousness of the espionage accusations, the men were formally charged with bribery and stealing commercial secrets, which are lesser charges.
Some legal analysts said the arrests appeared as though China was retaliating against Rio Tinto for its decision last year to scrap plans to accept a $19.5 billion investment from one of China’s biggest mining companies.
But a growing number of analysts soon surmised that the arrests may have grown out of the country’s tough negotiations with foreign suppliers over iron ore prices. Before the detentions, China’s steel industry association had repeatedly attacked Rio Tinto and other foreign iron ore suppliers for driving up the price of iron ore and negotiating unfairly.
On Monday, the court confirmed that iron ore negotiations were at the center of the case and insisted that Rio Tinto employees were passing secrets to top negotiators for the company. It said that in 2009, Mr. Hu and Mr. Wang obtained confidential information from the China Iron & Steel Association, the government body that negotiates iron ore prices with foreign suppliers. The court said the Rio employees had “damaged” China’s interests.
Bao Beibei contributed research
http://www.nytimes.com/2010/03/3 ... tml?ref=global-home