Rio Tinto executive to plead guilty to taking bribes

The Rio Tinto executive Stern Hu has indicated that he will plead guilty today to taking bribes as he faces a court in Shanghai on charges of industrial espionage and bribery.

The trial of the Australian and his three Chinese colleagues, which will be closely monitored by foreign businesses with interests in China, opened this morning.

Tao Wuping, Mr Hu's defence lawyer, said that his client had been charged with accepting six million yuan ($880,000) in bribes, and that Liu Caikui, a fellow defendant, faced charges of accepting three million yuan.

Both would plead guilty to accepting bribes while contesting the amounts involved, Mr Tao said.

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Mr Hu and his colleagues were brought to the Shanghai court by four police vans but were kept out of the public eye as they entered the building.

Court officials said that the session was open, but no foreign reporters were allowed inside, although journalists from Chinese media gained entry.

Tom Connor, the Australian Consul-General, declined to comment as he walked into the courthouse but said that he would speak later, which will provide a first chance to hear details of the charges filed against the men.

Officials have said that Australian diplomats will be banned from attending “closed” parts of the trial because it involves charges involving secrets.

The four men face accusations of taking bribes — a charge that carries a maximum sentence of five years in prison — as well as charges of engaging in commercial espionage. They could face seven years in jail on the latter charge.

Kevin Rudd, the Australian Prime Minister, said this morning his Government would monitor the trial closely.

He said: “China has a different legal system to Australia. China has a different legal system to the rest of the world. The world will be watching very closely how the trial is handled.”

In a system where the courts are closely guided by the ruling Communist Party and local authorities, cases that come to trial rarely fail to end with a conviction.

The four men were arrested in July 2009 after an acrimonious round of annual iron ore price negotiations and soon after the humiliating collapse of what would have been China's largest overseas investment — a $19.5 billion investment in Rio by Chinalco, a Chinese state-owned metals group.

Last week, however, Rio Tinto and Chinalco agreed a joint deal on a huge iron ore project in the West African state of Guinea, and Tom Albanese, the Rio chief executive, spent this weekend in Beijing, his second visit in a month, as part of the company's wider charm offensive towards China.

Beijing has said that the case will be handled by the book and that it will "fully guarantee" the rights of the defendants, who include the Chinese nationals Wang Yong, Ge Minqiang and Liu Caikui.

Joerg Wuttke, president of the European Union Chamber of Commerce in China, said: "It will be regarded as a litmus test of the status of the young Chinese legal system. Transparency matters."

The trial begins as China continues iron ore price negotiations with foreign miners.

Beijing has sought to convince Rio Tinto and other suppliers to give its mills lower prices than those paid by Japan and South Korea.

Miners are said to be seeking price increases of 90 per cent or more this year.

source business.timesonline.co.uk