By Bloomberg News
Aug. 19 (Bloomberg) -- China’s investigation of four Rio Tinto Group employees, including Australian Stern Hu, for alleged bribery and theft of commercial secrets may last two months, according to a law firm representing two executives.
A probe would be followed by one-and-a-half months of review by prosecutors before court hearings, according to procedures outlined in Chinese law, Shanghai-based lawyer Zhai Jian said. Zhai’s firm represent Ge Minqiang and Wang Yong.
Hu, head of Rio’s iron ore business in China, and three Chinese colleagues, were formally arrested this month for allegedly stealing secrets related to the steel industry, a publication run by the prosecutors’ office said Aug. 12. The detention since July 5 and arrest have strained relations between Australia and China.
“The duration of the two procedures can be extended depending on specific conditions,” Zhai said over the phone today. The “court hearing may be open to the public for cases that don’t relate to state secrets or personal privacy.”
Hu, Ge, Wang and Liu Caikui, the fourth Rio Tinto employee, were originally accused of the theft of state secrets, a charge that wasn’t included in the arrest statement this month.
“Given the complexity of the Rio case, the investigations may take longer than two months,” said Xiong Dingzhong, a Beijing-based lawyer at Hantong Law Firm, which isn’t representing any of the employees. “Stern Hu has been detained for six weeks before the official arrest. It is hard to determine whether that should be included in the two months.”
Initial Investigations
The charges come as London-based Rio Tinto, the world’s second-largest iron ore supplier, refused to budge in contract price talks with Chinese steelmakers this year. The company rejected in June a $19.5 billion investment by state-owned Aluminum Corp. of China in favor of a share sale and an iron ore joint venture with rival BHP Billiton Ltd.
Initial investigations showed that the Rio Tinto workers obtained commercial secrets about the steel industry through improper means as well as evidence of bribery, the publication of the prosecutors’ office had said.
The downgrade in charges from the theft of state secrets was a “conciliatory” gesture to calm investors, said Richard Cassin, author of “Bribery Everywhere, Chronicles From the Foreign Corrupt Practices Act.”
Seven Years
“While infringing trade secrets and commercial bribery are still serious, at least the threat of life in prison or even execution is removed,” said Cassin, partner at Singapore-based law firm Cassin Law LLC. Hu and his colleagues face a potential penalty of seven years in prison and a fine, he said.
Lawyers aren’t able to see details about the prosecution’s evidence before a case is put on trial, according to Chinese law, Hantong’s Xiong said. They can visit defendants and can see summaries on the progress of the investigations, he said.
Lawyer Duan Qihua will represent Stern Hu, while Tao Wuping will represent Liu, the Wall Street Journal reported Aug. 14. Duan and Tao couldn’t be reached immediately for comments.
Chinese companies have continued to invest in Australia. Exxon Mobil Corp. yesterday agreed to sell 2.25 million metric tons a year of liquefied natural gas to China from Australia’s Gorgon project for 20 years.
Australia’s Resources and Energy Minister Martin Ferguson said the agreement, worth A$50 billion ($41 billion) was a “landmark in our relationship with China.” Foreign Minister Stephen Smith yesterday had said difficulties in ties with China following the detention and a visit by Uighur leader Rebiya Kadeer must be managed carefully.
--Helen Yuan, Andrea Tan. Editors: Tan Hwee Ann, Douglas Wong.
To contact the reporter on this story: Helen Yuan in Shanghai at hyuan@bloomberg.net
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