Rio employees receive 'tough' jail sentences

09:09, March 30, 2010      

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Canberra 'respects' China's legal system

Four employees of British-Australian mining giant Rio Tinto were sentenced on Monday to jail terms ranging from seven to 14 years for taking bribes and stealing commercial secrets - a verdict the Australian government described as "very tough".

The Shanghai No 1 Intermediate People's Court sentenced Stern Hu, an Australian national who headed Rio's iron ore operations in China, to seven years in prison for taking bribes, and five years for stealing commercial secrets. However, he will serve 10 years in jail, the court said. Hu was also fined 1 million yuan ($146,000).

"On any measure this is a very tough sentence," said Australia's Foreign Minister Stephen Smith. "It is a tough sentence by Australian standards. As far as Chinese sentencing practice is concerned, it is within the ambit or within the range," he said.

But he added the Australian government respected China's legal and judicial processes and that the sentencing would not affect Australia's ties with China.

The other three defendants, all Chinese nationals - Liu Caikui, Ge Minqiang and Wang Yong - were sentenced to seven, eight and 14 years behind bars respectively. It is believed Wang got the longest jail term for receiving the highest amount of kickbacks from a steel tycoon in Shandong province.

The four were convicted of receiving over 92 million yuan in bribes.

The court said in the verdict that the defendants had also obtained confidential information from Chinese steel mills that had been used

as a bargaining chip to drive up the price that China pays for its iron ore imports from the world's three top suppliers: Rio, BHP Billiton and Vale.

It said the four had "damaged the competitiveness" of, and "caused severe losses" to, the Chinese steel industry and hurt China's national interests.

The court on the same day also ruled on a second case - that of Tan Yixin and Wang Hongjiu, executives at two major Chinese steel mills, Shougang Corp and Laigang - for allegedly leaking commercial secrets to Rio's employees. But details of the verdict were not immediately announced.

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