Rio Tinto executives officially charged

China has officially charged four employees of Anglo-Australian mining giant Rio Tinto, who were arrested last year amid tense price negotiations with Chinese steel companies, with bribery and obtaining commercial secrets.

The four, including Australian citizen Stern Hu, were detained in July and officially arrested in August on suspicion that they had violated Chinese national security. According to a statement released by the Number 1 branch of the Shanghai People’s Procuratorate, the four are officially indicted on charges of “taking advantage of their position to seek profit for others, and asking for, or illegally accepting, huge amounts of money from Chinese steel enterprises.” The executives allegedly requested and accepted bribes from Chinese steel companies.

They are also accused of attempting to steal commercial secrets from Chinese steel companies by making “promises”, or through illegal means, according to the report which was published by the state-run news agency Xinhua.

The report added that the police had concluded its investigation and sent the case to prosecutors on January 11.

Last year’s arrests came as Rio Tinto was engaged in tense price negotiations with Chinese steel companies over the sale of iron ore. It also came in the heels of Rio Tinto’s rejection of a US$19.5 billion deal to buy an 18 per cent stake in the company by the Aluminium Corp of China. Because of the timing, there has been speculation that the case was politically motivated.

The Wall Street Journal has reported that the Australian government has confirmed the indictments, but added that a trial date has not be set.

The Journal also reported that the case came as many foreign companies have re-evaluated their China strategies – especially whether the benefits of doing business in the world’s fastest growing emerging market outweigh the risks. It cited a threat from internet search giant Google to leave the China market, over an alleged attempt to break into its email system that was traced back to China.

The report also said that at least two foreign mining companies are now asking for waivers prior to commencing commercial negotiations, to preclude their executives from being charged with criminal wrongdoing in the performance of their duties.