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Australian exec gets 10 years in prison in Chinese bribery, theft case

Mining giant Rio Tinto's lead negotiator and three co-workers admitted taking about $13.6 million in bribes from private steel mills. Australia's foreign minister calls the sentence 'very tough.'

March 30, 2010|By David Pierson
  • Australian Consul-General Tom Connor speaks to the media outside the Shanghai courthouse where Stern Hu, an executive of mining giant Rio Tinto, was sentenced.
Australian Consul-General Tom Connor speaks to the media outside the Shanghai… (Frederic J. Brown / AFP/Getty…)

Reporting from Beijing — An Australian mining executive was sentenced to 10 years in prison Monday by a Shanghai court on charges of bribery and stealing commercial secrets.

Stern Hu, the lead negotiator for Anglo-Australian mining giant Rio Tinto, was found guilty along with three Chinese colleagues who faced the same charges.

The case has sparked heated exchanges between Australian and Chinese officials since the four men were detained in July.

Australian Foreign Minister Stephen Smith said Monday the prison term handed down was "very tough" and that there were "serious unanswered questions" because the commercial-secrets portion of the trial was conducted in secret.

Hu and his colleagues admitted to having accepted about $13.6 million in bribes from private steel mills that wanted to avoid buying iron ore from more costly state-run mills, according to the Xinhua news agency.

The arrangement undercut the state's China Iron and Steel Assn.'s desire for a united front in negotiating terms with Australian suppliers.

Australia supplies about 40% of China's iron-ore imports, a resource badly needed to keep up with the pace of urban development.

Officials say Hu and his co-workers' manipulation of prices added about $150 million in costs for more than 20 Chinese steel companies last year.

Others found guilty were Wang Yong, who faces 14 years in prison; Ge Minqiang, facing eight years, and Liu Caikui, facing seven years. The four men also were fined a total of $1.1 million.

The arrests last year raised suspicions because they came shortly after the Australian government rejected a $19.5-billion bid by Chinese state-owned metals company Chinalco to increase its stake in Rio Tinto.

The tensions between China and Rio Tinto already appear to have dissipated. Chinalco and Rio Tinto are discussing a deal to develop iron-ore reserves in Guinea in West Africa.

Rio Tinto Chief Executive Tom Albanese also attended a meeting with Chinese Premier Wen Jiabao last week and stressed the need to mend commercial ties with China.

david.pierson@latimes.com

Associated Press was used in compiling this report.

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