Author: cestmoi

Chinalco-Rio Tinto Post Mortem [Copy link] 中文

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Post time 2010-3-30 05:20:14 |Display all floors

Anglo-Australian BHP Rio SACKS its senior executives publicly!

BHP Billiton Rio Tinto's most senior executive on the ground in China, Mr Stern Hu, has pleaded guilty to accepting bribes, as did the three other shaddy BHP Rio Tinto managers, all of dubious moral principal and characterized by an empire-building mentality to enrich oneselve by all means possible.

Mr Hu admitted guilt and was sentenced to 10 years prison, Mr Wang got 14 years, Mr. Ge got 8 years and Mr. Liu got 7 years.

These questions begged to be asked:

How did these unprincipled individuals climb so high on the Anglo-Australian BHP Billiton Rio Tinto corporate ladder?

How does an empire-building monopoly like Anglo-Australian BHP Rio choose its senior executives?

What criteria does an empire-building monopoly like Anglo-Australian BHP Rio use to appoint its senior executives?

BHP Billiton Rio Tinto has its back against the wall. It did the only thing an unprincipled monopoly can do, cut loss by sacking its executives publicly. Must be humiliating for this Anglo Australian empire.

Anglo-Australian BHP Billiton Rio Tinto is one of the world's powerful resource duopoly with an empire building mentality and a ruthless, unprincipled business savvy that hearkens back to the days of the British East India Company. The latter smuggled opium to undermine Chinese society, one wonders what BHP Billiton Rio Tinto would do to trump that.
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Post time 2010-3-30 05:25:55 |Display all floors

The humiliation continues worldwide for BHP Billiton Rio Tinto

As reported by the 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
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

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Post time 2010-3-30 07:53:19 |Display all floors
Originally posted by cestmoi at 2010-3-30 07:25
(Cestmoi: Really? Then tell us, what criteria did BHP Rio used to select and appoint these executives?)

Possibly the same criteria applied to any employee, they trusted them.
Of course, if BHP refused to employ Chinese, because of the endemic corruption & guanxi amongst China's officials, as we see reported in CD, then you'd be the first to cry racism.

Originally posted by cestmoi at 2010-3-30 07:25
(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.)  

Piss poor attempt, Cestmoi. The guys were trusted by Rio. Apparently they breached that trust, according to the "evidence" presented at the largely closed trial.
What about the Chinese steel executives who appear to be major players in this apparent corruption ?
Why do Chinese SOEs employ such corrupt and bribery prone officials ?
Why does CISA employ people who will leak the "minutes" of the meetings ?
"他不是救星, 他是一个非常淘气男孩" - Monty Python

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Post time 2010-3-30 07:58:33 |Display all floors

Monopoly BHP Billiton's significant win against the world

Anglo-Australian BHP Billiton Rio bends the world to its wishes, forcing countries to accept its diktat.

Well yes, of course, BHP Billiton gets what it wants, when it wants it. It is after all a global resource empire and a duopoly.

Doesn't that remind you of the empire built by the British East India Company? They smuggled opium to undermine and corrupt China, wonder whether the Anglo-Australian BHP Billiton Rio Tinto can do worse.

Normally a monopoly within a country or a region is not tolerated by its citizens, but since this global duopoly and white Australian monopoly benefits whites only and was created with the intent to squeeze China and get the last drop of blood from other East Asian countries, it is acceptable.

After all, these people did a lot of work to achieve that, like committing genocide against the Aborigine people.

And the white Australians are still whingeing... wonder whether white Australia will whinge more if they loose one of their frigates in an unfortunate mishap.

BHP in 'significant win' on iron-ore contracts
March 30, 2010 - 10:22AM

Mining giant BHP Billiton says it has reached agreement to sell most of its iron ore on shorter term contracts.

''BHP Billiton today announced that it had reached agreement with a significant number of customers throughout Asia to move existing iron ore contracts that were previously priced annually onto a shorter term landed price equivalent basis,'' the company said.

''The agreements reached represent the majority of BHP Billiton's iron ore sales volume.

''The structural change that these settlements represent is consistent with BHP Billiton achieving market clearing prices.''

IG Markets research analyst Ben Potter said the deal was a ''significant win'' for the company over Asian steel mills, who had been resisting moves away from annual contract pricing.

''BHP Billiton appears to have convinced them that this is fairer and more transparent way of pricing that eliminates large discrepancies between spot and contract pricing,'' Mr Potter said in a research note.

''The question now remains at what price will these more frequent adjustments be set.

''This lays the foundations for the likes of Rio Tinto and Vale to follow down the same path.''

Mr Potter said the announcement would be positive for the share price, ''but by how much is anyone's guess''.

The announcement follows a similar agreement BHP Billiton reached earlier this month with its coking coal customers in Europe, China, India and Japan.

At the company's half-year results briefing last month, BHP Billiton chief executive Marius Kloppers said the spot market was the ''best indicator'' of supply and demand.

''I always point people back to where is the market today as the best indicator of what the supply and demand is and as the best indicator of what expectations should be on where prices are heading,'' Mr Kloppers said on February 10.

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Post time 2010-3-30 16:12:19 |Display all floors
Originally posted by cestmoi at 2010-3-30 09:58
Doesn't that remind you of the empire built by the British East India Company? They smuggled opium to undermine and corrupt China, wonder whether the Anglo-Australian BHP Billiton Rio Tinto can do worse...

Actually, Cestmoi, you're conveniently neglecting the fact that there was already a market supplied by local Chinese suppliers, and the British sold opium to ready and willing chinese dealers.

Originally posted by cestmoi at 2010-3-30 09:58
Normally a monopoly within a country or a region is not tolerated by its citizens, but since this global duopoly and white Australian monopoly benefits whites only and was created with the intent to squeeze China and get the last drop of blood from other East Asian countries, it is acceptable....

Cestmoi, you conveniently neglect to comment on the monopoly WITHIN China, the CISA who was designated as the monopoly buyer of imported ore, which it then sold on to internal steel mills. This case seems to involve smaller mills trying to bypass the CISA monopoly.
Oh and the Japanese and Koreans didn't seem to whinge quite so much as China.
"他不是救星, 他是一个非常淘气男孩" - Monty Python

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Post time 2010-3-31 04:25:24 |Display all floors

Something is really rotten, and it's not in the state of Denmark.

The Age
Billionaire who bribed Rio exec unlikely to be charged
March 31, 2010
THE well-connected billionaire who testified to giving $US9 million in bribes to a Rio Tinto executive is unlikely to be prosecuted, according to a Chinese news report.

The National Business Daily, which is partly owned by the Shanghai municipal government, reported yesterday that small private steel mills that paid bribes to Australian Stern Hu and three other Rio Tinto employees would be processed through the Chinese justice system, citing an inside source.

But the billionaire steel magnate who paid by far the biggest bribe would escape.

''According to the relevant laws and legal interpretation, Du Shuanghua is not to be pursued for criminal responsibility by judicial authorities,'' said the report, which cited inside sources.

Other than Mr Du, it said ''some companies involved in the case will be handled by the institutions of justice separately because of their bribery of Stern Hu and others''.

The National Business Daily is the only Chinese news outlet claiming to run inside stories on the Stern Hu court proceedings. Many other Chinese journalists covering the trial have been ordered not to publish their reports at all.

Last week the publication told how Mr Du, founder of Rizhao Steel, provided written testimony about his $US9 million payment to Rio Tinto's Wang Yong, which Wang had contested on the grounds that it was a loan that had been repaid.

Mr Du's testimony helped Judge Liu Xin sentence Wang Yong to 14 years in jail, by far the heaviest of the sentences handed out this week.

The National Business Daily reporter answered The Age's phone call, but said it was his company's policy not to speak with foreign journalists.

Mr Du was ranked No. 2 on the Hurun Report's rich list, with 35 billion yuan, in 2008 before a Shandong government steel company moved to acquire control of his Rizhao Steel last year at a fraction of the market price. Mr Du has not answered his mobile phone since last week's court proceedings, amid speculation that he might have been arrested.

He is well connected with relatives of President Hu Jintao as well as the President's factional opponents, such as Tianjin Communist Party chief Zhang Gaoli.

Yesterday the Economic Observer, an independently minded and pro-business newspaper, published a story ''In Defence of Du Shuanghua's bribery connection: Iron Ore Supply is Life and Death''.

It explained how Mr Du had to cut corners because private steel mills have to do that to survive. The biggest challenge was securing iron ore at the low ''benchmark'' price that state-owned companies could, rather than buying from licensed importers at a huge mark-up, even it had to pay bribes to do so.

''Like many other small and medium-sized private steel mills, Rizhao Steel has long been in a disadvantaged position and its prospects of survival were poor,'' said the report. ''There seemed no second choice for Du Shuanghua and other private steel mills.''

The Economic Observer report also quoted Xue Jian, vice-president of Rizhao Steel, saying the company was operating normally while it awaited the outcome of last week's testimony. In January last year, Xue Jian became a director of Kai Yuan, a Hong Kong-listed company with two of President Hu Jintao's relatives among its directors.

Mr Du has enmeshed his personal and corporate investments with Kai Yuan as he tried to retain control of Rizhao Steel company.
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Post time 2010-3-31 09:07:00 |Display all floors
Originally posted by emucentral at 2010-3-30 03:59
While the bribery convictions appeared well substantiated, the convictions and the court's tough rhetoric could add to diplomatic tensions and exacerbate concerns that China's business and political environment is becoming more difficult and unpredictable.

Mr Smith said yesterday's verdict left ''serious unanswered questions'' because Australian officials had ''very regrettably'' been locked out of that part of the trial dealing with theft of commercial secrets, for which Hu was sentenced to five years.

What is astonishing here is that BBS members always shout 'where is the evidence' to claims made by non-Chinese in these forums. Well, where IS the evidence of their stealing commercial secrets?

Yet Chinese courts hold closed trials, with witnesses not present (no chance of cross-examination  & ability to view the credibility of said witness) and all decided in a couple of days.

So basically the judges:

Listened to the prosecution arguments.
Studied statements from witnesses who were not present.
Listened to defendants denials.

ALL behind closed doors (for the commercial secrets element). Which in itself is a contravention of Chinese law.

At a trial for which the defendants lawyers were not given full access to prosecution evidence.

And at the same time, the briber, the 2nd richest man in China and personal friend of H u J i n t a o 's relatives was not prosecuted.

If this is to be held as an exemplar for how justice is done in China, then I think you need to rework the system.

Hardly transparent.

With all the chips stacked against them, no wonder people have claimed 'justice is blind'.

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