IndustryWeek : Harsh Jail Terms for Rio Tinto Four
Home : Economy & Public Policy : Courts : Harsh Jail Terms for Rio Tinto Four

Harsh Jail Terms for Rio Tinto Four

Executive received 10 years while his colleagues received terms of 14, 8, 7 years.

By D'Arcy Doran, Agence France-Presse

March 29, 2010

China jailed an Australian executive with mining giant Rio Tinto for 10 years and handed stiff terms to three of his colleagues on March 29 for stealing trade secrets and pocketing millions in bribes.

The climax to the trial in Shanghai -- which stoked foreign investors' anxiety about the rule of law in China -- provoked protests from Australia, which said the prison term for Stern Hu was "very tough" and "harsh."

But the Anglo-Australian mining firm, a prime supplier of the raw materials that China needs to sustain its economic boom, announced it was firing the convicted quartet and said it wanted to maintain good relations with Beijing.

Hu and the three Chinese staff were convicted of taking more than $13 million in kickbacks from Chinese steel firms during tense 2009 iron ore talks, which the court said they had helped ruin, and of stealing trade secrets.

Hu, head of Rio Tinto's Shanghai office, was sentenced to seven years for bribery and five more on the industrial espionage charge -- but the court reduced the combined sentence to 10 years.

His colleagues Wang Yong, Ge Minqiang and Liu Caikui were given jail terms of 14, eight and seven years respectively.

The actions of the defendants "severely damaged the competitiveness of China's steel companies" and "isolated" China during last year's iron ore price talks, leading to their collapse, presiding judge Liu Xin told the court. "They took advantage of their favorable position in the iron ore trade and teased out information by dangling the promise of profits," the judge said.

"The four have confessed criminal information that prosecutors did not know," he said, flanked by two other judges.

Displaying 1 of 3
Page:<< Back · Next >>
View article on one page
Spotlight

How to Turn Leaders into 'Strategists'

By Jonathan Katz
New book by Harvard Business School professor explores why some executive strategies fail and others succeed.

Read Full Story
Also on IndustryWeek.com

New White Papers

More White Papers »

Poll
Which manufacturing sector has the best chance of outperforming the U.S. economy this year?






Comment in the IW Forums.