China: Verdict in Rio Tinto case expected on Monday

Beijing – The verdict in the high-profile trial of four employees of mining giant Rio Tinto will be delivered on Monday, the Anglo-Australian firm announced on Thursday. The four defendants are accused of buying industrial secrets and taking 92.18 million yuan ($13.5 million) in bribes. Whatever happens will have an important impact on future relations between China and foreign companies operating on Chinese territory.

Rio Tinto executive Stern Hu, from Australia, and three Chinese employees pleaded guilty to taking money, and one admitted to commercial espionage.  Their trial is very embarrassing for Chinese authorities because of its potential repercussions on Chinese businessmen and government officials who took part in the illegal activity.

For instance, the prosecution claims Du Shuanghua, chairman of Rizhao Steel Holding Group, paid US$ 9 million to Wang Yong, one of the defendants. Mr Wang’s lawyer tried to get Du to testify in court, but failed. In fact, Wang did admit receiving the money but said it was only a loan.

The fact that the trial was held in camera has not gone down well in Australia. It has become particularly important not only because Rio Tinto is the world’s third largest mining company, but also because of the authorities’ firm reaction to the affair. In fact, Australian Prime Minister Kevin Rudd yesterday said, “the eyes of the world are focused on the way in which this trial is conducted and what happens as a result of it”. This is especially true for the way foreign companies can expect to be treated in the country.

Australia would make a “considered statement” at the conclusion of the court proceedings, the foreign ministry said on Thursday in its statement.

Commercial espionage is not rare, especially in developing countries as companies try to discover their competitors’ strategy. This trial’s verdict will be an indication as to how Beijing will likely deals with similar situations in the future, especially when national interests are directly involved.

The four Rio Tinto officials were arrested in July during contentious iron ore contract talks between top mining companies and the mainland’s steel industry, which is the world's largest consumer of the raw materials. Eventually, the talks collapsed. If they are found guilty, all four could get up to 7 years in prison for stealing secrets.

A month before they were detained last July, Rio Tinto had rejected a US$ 19.5 billion investment from state-owned Aluminum Corp. of China.

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