Author: cestmoi

Chinalco-Rio Tinto Post Mortem [Copy link] 中文

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Post time 2010-3-31 23:56:19 |Display all floors

Failure of corporate governance.

BHP Rio Tinto knew about the briberies all along but declined to act on it. The monopoly adopted a deliberate policy of benevolent neglect towards briberies by its senior staff in China.

As a regional monopoly and a global duopoly, BHP Rio Tinto can throw its weight around and ignore good corporate governance, this monopoly believed it can bribe its way through anything.

Now it is calling in the big names on its payroll to pore oil on troubled water for them.

Rio Tinto calls in Kissinger to mend fences
March 31, 2010

MINING giant Rio Tinto has engaged the services of 86-year-old Henry Kissinger to help rebuild the company's bridge to China in the wake of the Stern Hu affair.

As fallout continues from the jailing of Hu and three other Rio Tinto executives in China, it has emerged that the company turned to the former US Secretary of State last year after the collapse of its US$19.5 billion investment deal with Chinalco and the arrests of the executives.

Mr Kissinger has been well known and respected in China since his 1971 meeting with premier Zhou Enlai paved the way for president Richard Nixon's historic meeting with Chairman Mao Zedong the next year.

Rio yesterday declined to comment on Mr Kissinger's role.

But The Age understands that Mr Kissinger has contributed to Rio restoring its relationship with China and continues to be on the company's books.

He is believed to have helped secure a meeting on Rio's behalf with Wang Qishan, a Politburo member who handles many of China's global financial affairs.

Mr Kissinger's role came to light as claims emerged that Rio was told months before the arrests of Hu and his three colleagues of potential ''dodgy dealings'' within its China operations but resisted internal calls for an investigation.
(Cestmoi: So BHP Rio knew about the briberies all along but did not act on it! BHP Rio Tinto let Mssrs. Hu, Wang, Ge and Liu continued bribing and accepting bribes but now washes its hands off the affair. What we have here is a failure of corporate governance. )

There was also more political fallout, with the Chinese government expressing ''serious concern'' over Australian criticism of the trial of Hu and his colleagues.

A day after criticism by Foreign Minister Stephen Smith, Prime Minister Kevin Rudd said he had reservations about the conviction and the secrecy. ''China, I believe, has missed an opportunity to demonstrate to the world at large transparency that would be consistent with its emerging global role,'' he said.

Hu, an Australian, was sentenced to 10 years' jail by a Shanghai court for receiving bribes and obtaining commercial secrets, but Australian officials were blocked from attending part of his trial. Mr Smith said the resulting uncertainty over what constitutes a commercial secret would have repercussions for the international business community's dealings with China.

Chinese foreign ministry spokesman Qin Gang hit back, saying: ''The Australian side should respect that result and stop making such irresponsible remarks.''

The opposition accused the government of moving too slowly and not protesting strongly enough when diplomats were told they would not have access to the full trial.

''Kevin Rudd has been exposed as having little or no influence with the Chinese leadership,'' said opposition foreign affairs spokeswoman Julie Bishop.

Mr Rudd said the government had made ''strong, high-level and frequent representations'' on Mr Hu's behalf.

Hu's lawyer, Shi Keqiang, told The Age he had not talked with his client since the verdict, but they would decide whether to appeal in coming days.

Greens senator Bob Brown called on the Australian Securities and Investments Commission to investigate what Rio knew about the use of commercial secrets, given the company ''received multibillion-dollar advantages from the activities of Hu and his fellow accused".

The Age has been told that a number of Rio employees in Singapore raised concerns with management about the activities of employees in China more than a year ago but the concerns were never formally investigated.

A well-placed source, speaking on condition of anonymity, said a rapid rise in the iron ore spot price led some to question whether bribes were being offered. ''Some of the guys in Singapore said 'let's have an investigation' but that investigation was quashed by senior company figures,'' the source said. Rio's internal complaints policy requires matters raised by employees to be addressed. A spokesman said the company would ''always investigate such claims in line with established formal processes''.

(Cestmoi: BHP Rio Tinto tell us this only now, after the excretia has hit the fan, that it adopted a policy of benevolent neglect towards briberies by its senior staff? What we have here is a failure of corporate governance. )

Rio has ordered an independent review into its processes but is unlikely to make the results public.

But the company could face investigation by regulators in Australia and overseas. ASIC said it was monitoring events to determine whether it would conduct a probe. The UK's Serious Fraud Office is also gathering information on Rio but is yet to commence an investigation.
(Cestmoi: Let us see whether Australia's ASIC and the UK's Serious Fraud Office can handle BHP Rio Tinto. What we have here is a failure of corporate governance. )

Timothy Devinney, professor of strategy at University of Technology in Sydney, who has 25 years' experience in Chinese trade, said an investigation into Australian companies operating in China could uncover a culture of misbehaviour.

''If you scratch below almost any company operating in China you would probably find things you don't want to know about,'' Professor Devinney said. ''You wouldn't want to go into this investigation unless you were prepared to pull the curtain aside.''


Web Links ... -20100330-rbht.html
Let the dice fly high

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Post time 2010-4-1 04:07:34 |Display all floors

Oh, by the way, the issue is with RIO employees, not BHP.

Originally posted by cestmoi at 2010-4-1 01:56
Failure of corporate governance.

BHP Rio Tinto knew about the briberies all along but declined to act on it. The monopoly adopted a deliberate policy of benevolent neglect towards briberies by its senior staff in China. ...

Well duh !
Clearly there was a failure of corporate governance, they trusted those 4 Chinese employees, whereas clearly they should not have done so.

Of course had Rio investigated their 4 China based employees then people like you would be crying racism. Oh, and didn't it turn out that the Rio employees were being bribed rather than doing the bribing ? That's the sense I got from the reports from China of the charges against them - receiving bribes.

Whatever the case with the Rio employees, clearly there is serious endemic corruption within CISA and various Chinese steel mills to allow this sort of thing to happen.
And none of the politically well connected Chinese officials are going to be charged with bribery.

What do you say to that you hypocritical racist ??
"他不是救星, 他是一个非常淘气男孩" - Monty Python

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Post time 2010-4-4 06:14:57 |Display all floors
Clearly Cestmoi has been stunned into silence.
"他不是救星, 他是一个非常淘气男孩" - Monty Python

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Post time 2010-4-11 17:31:46 |Display all floors

this sounds like sour grapes

Originally posted by cestmoi at 2010-3-15 03:43
This conclusion should clear the way for a speedy release of Stern Hu, who shouldn't be working in China anymore. He will lose his advantage over his white Australian co-workers and internal office politics will soon sideline him

Cestmoi, until you openly embrace in China, at your direction, the same very open immigration policy to non-Han, as "white Australia" has to the world, your opinion is what it is.  Basically, anaemic.

Likely, you were knocked back for a job or something significant to you (?residency), in Australia, or else I'm at a loss to explain your frequent embittered recourse to "white Australia", which flies in the face of reality.

As for Hu, it seems China's judiciary is in bed with politics. History tells us where it ends. Good luck!
(beast ex machina)

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Post time 2010-4-11 17:51:47 |Display all floors

Bribery in China is quite normal

Even if it is illegal, that is how things are done

When it becomes a point of law, it seems, is when the Chinese government decides.
(beast ex machina)

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Post time 2010-4-11 18:44:29 |Display all floors
So this 'balanced' report was able to find excuses as to why this illegal activity was acceptable - Mr. Du had no other choice apparently.

It would appear that the courts agree - he is not to be charged. But the person he paid was given 14 years in prison. Astonishing!

Originally posted by emucentral at 2010-3-31 04:25
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 Jin tao's relatives among its directors.

Let's have a closer look at this Kai Yuan company:

Kai Yuan Holdings Limited, an investment holding company, engages in the production and supply of heat energy in the People’s Republic of China. The company also involves in the engineering and maintenance of heating systems and management of heating pipes. In addition, it engages in property investments in the People’s Republic of China and Hong Kong. The company was formerly known as Guo Xin Group Limited. Kai Yuan Holdings Limited is based in Admiralty, Hong Kong.

Aged 33, Yishi Hu has been serves as the President of Shanghai Holdeasy Advertising Company Limited. Mr. Hu has been the Chairman and Executive Director of Kai Yuan Holdings Limited (formerly, Guo Xin Group Ltd.) since April 17, 2007 and is responsible for strategic planning including business objectives and directions. He serves as the Director and General Manager of Shanghai Chuang Yang Advertising & Broadcasting Co., Ltd. Mr. Hu has an extensive experience in China affairs ... and business. He serves as an Executive Director of World Trade Bun Kee Ltd. Mr. Hu serves as a Director of Tidetime Sun (Group) Limited (formerly, Sun Media Group Holdings Limited). He served as an Executive Director of China Pipe Group Limited from June 2007 to June 6, 2008. He graduated from Shanghai International Tourism Vocational Technology School.

Total Annual Compensation: $1,750,000  

Aged 65, Non-executive director, Jin Xing Hu serves as Vice President and General Secretary of Shanghai Huajie Affection Foundation. Mr. Hu serves as President of Shanghai Morelove Foundation. He served as Principal of Shanghai Fu Xing High School from October 1997 to February 2005. He served as Principal of Shanghai Foreign Language University for ten years. He also served as Vice Principal of Shanghai Fu Xing High School. He served as Vice Principal of Shanghai Hainen Secondary School from February ... 1994 to July 1997. He serves as Non-Executive Director of World Trade Bun Kee Ltd. and has been Non-Executive Director of Guo Xin Group Ltd. since June 4, 2007. He serves as a Director of Shanghai China Tokyo Hotel. He has been a Non Executive Director of Kai Yuan Holdings Limited since June 4, 2007. He served as Non Executive Director of China Pipe Group Limited from June 2007 to June 6, 2008. He was a Member of the Eighth to Tenth of Standing Committee of the C P P C C of Hong Kou District, Shanghai, the People's Republic of China (the "PRC"). Mr. Hu is a Graduate from Shanghai Normal University, major in Chinese Language & Literature.

Total Calculated Annual Compensation: $906,000

Strange don't  you think that a former high school & university principal is given all these non-executive positions in hotel groups & industrial companies. Why would any company pay him almost $1m for his expertise?

And this among a case where people are receiving 10 year+ jail sentences for accepting bribes. I need to ask -  just what is Mr Hu doing for his $1m in payments?

Teaching the employees Chinese Literature? (going from being a High School Principal to University Principal must show good teaching skills!)

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Post time 2010-4-11 20:36:41 |Display all floors
What's up?

People think a retired high school principal being paid $1m for services to the pipe & real estate industry is not so unusual?

No connection whatsoever that he is a cousin of  H u   J i n t a o?

How many years did Stern H u get for taking $1m in bribes?

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