March 22, 2010 / 2:55 AM / 8 years ago

Four Rio employees plead guilty on China bribes

SHANGHAI (Reuters) - Four Rio Tinto executives on trial in China, including Australian Stern Hu, pleaded guilty to taking bribes, while contesting the amounts, lawyers at the hearing said on Monday.

Hu and three Chinese employees of giant miner Rio -- Liu Caikui, Ge Minqiang and Wang Yong -- faced prosecutors in the court in Shanghai, China’s financial hub, accused of taking bribes and violating commercial secrets.

The case has thrown a spotlight on China’s often murky marketplace, where legal boundaries can be vague, creating pitfalls for businesses seeking profits from the world’s third-biggest economy.

“Stern Hu definitely pleaded guilty (to the bribery charges)”, Tao Wuping, the lawyer for co-accused Liu, told Reuters after the hearing.

Tom Connor, the Australian Consul General in Shanghai who attended the hearing, told reporters that Hu was accused of taking bribes worth 1 million yuan ($146,500) and $790,000.

“Mr Hu made some admissions concerning some of those bribery amounts, so he did acknowledge the truth of some of those bribery amounts,” Connor said.

Lawyers for the three Chinese defendants said their clients also acknowledged taking bribes, but rejected some of the accusations made by prosecutors.

“Part of the charge should not constitute a crime,” lawyer Tao said, referring to his client, Liu, who was charged with receiving 3.7 million yuan in bribes.

Wang Yong admitted he was “guilty in part”, his lawyer, Zhang Peihong, said.

Zhang said $9 million that Wang was accused of taking as a bribe was legitimate “profit from an iron ore deal”.

The $9 million was part of 70 million yuan amount that Wang was accused of taking as bribes, said Zhang.

“There are plenty of reasons to argue against the rest of the amount,” Zhang added.

The trial is scheduled to continue until Wednesday, with the commercial secrets charges likely to be heard on Tuesday, said the lawyers.

COMMITTED TO CHINA

While the trial was opening in Shanghai, Rio chief executive Tom Albanese signaled to an audience in Beijing that he did not want to jeopardize business ties with China, the world’s biggest consumer of iron ore.

Cars drive in to the Shanghai Number One Intermediate People's Court on the morning of Rio Tinto trial, March 22, 2010. REUTERS/Nir Elias

“This issue is obviously of great concern to us,” Albanese told a forum of officials and executives, referring to the case.

“I can only say we respectfully await the outcome of the Chinese legal process,” he told the forum, held in an exclusive state guesthouse.

Albanese said “we remain committed to strengthening our relationship with China, not just because you are our biggest customer, but because we see long-term business advantages for both of us”.

Foreign reporters were not allowed to attend the forum, and Rio emailed copies of Albanese’s speech. A Chinese webcast of it did not include his comments on the trial.

The four employees from Rio’s iron ore team, including Hu, were detained last summer at the height of fraught negotiations over 2009 ore prices, creating a furor over China’s opaque state secrets laws.

Slideshow (4 Images)

Chinese media last summer accused the four of seeking information about Chinese mines and steel mills, which many firms consider legitimate market information.

Rio has said that its employees did nothing wrong.

Shanghai is likely to want the case over quickly, before its much ballyhooed 2010 World Expo opens in May.

Foreign reporters were not allowed to attend the trial.

China has excluded Australian diplomats from observing the part of the trial concerning commercial secrets, drawing protests from Canberra, which says they have the right to be present for the whole trial, scheduled to last three days.

WARNING TO AUSTRALIA

A Chinese researcher in a think-tank run by the nation’s Ministry of Commerce said there was a strong case against the Rio employees and warned Australia to keep a distance.

“The Australian government and public need to calmly and rationally consider this question: should the government waste such a large amount of political and financial resources to pay the bill for certain companies’ immature and even illegal ways?” the researcher, Mei Xinyu, wrote in the Chinese-language Shanghai Securities News.

“What Rio Tinto and Stern Hu did would be utterly taboo in any host country,” wrote Mei.

The trial opened on the same day that, according to one Chinese news report, Internet giant Google may announce whether it will pull out of China over its complaints about censorship and hacking. ($1=6.825 Yuan)

Additional reporting by Tom Miles, David Stanway and Rujun Shen in Beijing; Writing by Ben Blanchard; Editing by Alex Richardson

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