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Rio Tinto bribery case advances in China

STORY HIGHLIGHTS
  • Bribery case involves 4 employees of mining giant Rio Tinto
  • All four, including one Australian, have been detained for six months
  • Arrests follow collapse of a $19 billion deal between Rio Tinto and China

BEIJING, China (CNN) -- A bribery case that has raised concerns among international investors in China has been turned over to prosecutors, who will now decide whether to take it to trial, Australian officials said Monday.

The case involves four employees of Rio Tinto, one of the world's largest mining companies. One of the four, Stern Hu, is an Australian citizen.

An official with China's Public Security Bureau said Monday that the investigation phase of the case had not concluded. The conflicting accounts could not be immediately reconciled.

Hu and three Chinese nationals working for Rio Tinto have been detained for six months.

China has said that the four employees bribed executives from 16 of China's major steel mills to obtain industry information.

Rio Tinto has called the allegations surprising and said it was not aware of any evidence to support an investigation.

The arrests came a month after Rio Tinto broke off a more than $19 billion investment deal with China state-owned Chinalco. Speculation abounded after the arrests about possible government retribution for the failed deal. China has rejected such allegations.

The actual charges against the four will not be known unless prosecutors decide to press ahead with a trial, according to an Australian foreign ministry representative.

"The Australian government continues to take a close interest in the case. At every opportunity, we have emphasized to the Chinese authorities the need for the case to be handled transparently and expeditiously," said the Australian representative, who was not identified by name.

The ministry did not know how long the prosecutors would take to decide.

"This transfer is the next stage in a continuing legal process under Chinese law," said Sam Walsh, an executive with Rio Tinto. "It would not be appropriate for the company to comment any further at this point."

Rio Tinto's $19 billion deal with Chinalco was signed in February and was awaiting a review by Australia's Foreign Investment Review Board.

The deal soured as opposition party members in Australia ratcheted disapproval, saying it would put Australian resources at strategic risk.

Others saw the deal as an alliance that would further link resource-rich Australia with the commodities-hungry Chinese market.

Rio Tinto has headquarters in London, England, and Melbourne, Australia.