SHANGHAI — Unexpectedly harsh jail sentences of seven to 14 years for four Rio Tinto employees charged with taking bribes and stealing commercial secrets could augur tougher times for foreign companies and errant executives in China’s unruly business world.
Seeking to protect its business ties from what it termed the men’s “deplorable behavior,” the mining giant promptly fired all four.
The court’s rulings against Australian citizen Stern Hu, former manager of Rio Tinto’s iron-ore business in China, and three Chinese co-workers suggest authorities are taking a sterner stance toward foreign companies caught violating the country’s often selectively enforced corruption code.
The 10-year sentence for Hu was “very harsh,” Australia’s Foreign Minister Stephen Smith said after the verdict was read Monday by the lead judge at the Shanghai People’s Intermediate Court. It was unclear whether Hu or his co-workers, who have been in custody in Shanghai since July, would appeal.
Rio Tinto, based in London and Melbourne, Australia, is a key industry negotiator in price talks with China’s state-owned steel mills, and the arrests of its employees last August were initially thought linked to Beijing’s anger over high prices it paid for iron ore — a key commodity for China’s booming economy. That belief was shaken last week after the four pleaded guilty to taking bribes from steel mills trying to get preferential access to ore supplies.
Australia said Hu’s sentence wouldn’t affect ties with China, but some experts said the secrecy of parts of the trial underlined worries companies already have about doing business in a country where legal proceedings are often opaque.
