Update: Rio deplores conduct of disgraced executives

29th Mar 2010 09:13

Mining giant Rio Tinto has terminated the employment of the four employees who have been found guilty by a Chinese court of taking bribes and stealing business secrets, and described the behaviour of the convicted men as 'deplorable'.'Receiving bribes is a clear violation of Chinese law and Rio Tinto's code of conduct,' said Sam Walsh, chief executive of Rio Tinto Iron Ore.Walsh added that an internal investigation by the company did not uncover any evidence to support the Chinese government's claims of wrongdoing on the part of the erstwhile Rio employees, and concluded 'that the illegal activities were conducted wholly outside our systems.'Tom Albanese, chief executive of Rio Tinto, also criticised the conduct of the convicted men and said that ensuring the behaviour of the disgraced employees does not 'prevent Rio Tinto from continuing to build its important relationship with China' is a high priority for him.The company issued a statement in response to the announcement of sentences for the four former Rio executives.Stern Hu will serve 10 years in prison in China after pleading guilty to charges of bribery and commercial espionage. The Shanghai Intermediate People's Court said Hu, who was Rio Tinto's lead negotiator for its iron ore operations in China, received a 12 year sentence consisting of seven years for taking bribes and five years for stealing business secrets, with two years of the sentences to be served concurrently. Reports said Hu apologised to the court and to Rio, admitting he took more than $900,000. Three other Rio employees also received heavy sentences. Iron ore salesman Wang Yong 14 years, while Ge Minqiang and Liu Caikui were sentenced to eight years and seven years respectively.All four men had pleaded guilty to the charges of taking money but disputed the amounts and aspects of the accusations.The quartet were paid by small private steel companies to give the firms access to negotiations over the price of iron ore as Rio traditionally gave priority to large state-run steel companies, a lawyer for Hu said.The severity of the sentences shocked many observers outside of China, while there have also been concerns voiced about the way the trial was conducted. The Australian Foreign Minister, Stephen Smith, described the jail term as 'a tough sentence'. Smith said that Australian officials had seen evidence which indicated that bribes had been taken but the Australian government had not been allowed to see any evidence relating to the charges of stealing state secrets.'As a consequence of that I think there are various unanswered questions which go to that part of the trial and go to that matter as far as Stern Hu is concerned,' Smith said.