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China court to deliver Rio Tinto verdict

From John Vause, CNN
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Rio Tinto trial update
  • Verdict expected today in the China bribery trial of four Rio Tinto executives
  • The case is being closely watched over fears of a China crackdown on foreign firms
  • An Australian national on trial has admitted to accepting about US$1 million
  • Rio Tinto plc
  • China
  • Business
  • Australia

Beijing, China (CNN) -- An Australian executive of one of the world's largest mining companies will learn his fate Monday afternoon when a Shanghai court determines whether he is guilty of bribery and stealing commercial secrets.

The case against executive Stern Hu, and three other employees of British- and Australian-owned Rio Tinto, is being closely watched over fears of a government crackdown on foreign companies doing business in China.

The court will meet at 2 p.m. (2 a.m. ET) to deliver its verdict, said Hu's lawyer, Jin Chunqing.

It was not immediately clear whether the court also would announce on the same day the verdict against the three other employees who were tried on the same charges.

The three-day trial last week was closed to foreign media. Australian consular officials were allowed in the Shanghai courtroom for the bribery phase of the case, but were barred from witnessing the theft portion.

Because of the closed-door trial, it was not clear what evidence prosecutors presented on the far more serious charge of stealing commercial secrets. It also was not known how the defendants pleaded.

"Please kindly understand me that my colleagues and I are obliged to keep any and all information related to (that charge) in the most strict confidence," Jin said.

In China, obtaining commercial secrets carries a maximum penalty of seven years in prison.

On the bribery charges, Hu has admitted taking money -- totaling about $1 million -- on two occasions from two steel mills in northern China, his lawyer said.

The lawyer for another defendant also said his client acknowledged receiving money.

CNN has not been able to verify whether the other two defendants also admitted taking money.

Jin hopes his client will receive a lenient sentence on the bribery charges because Hu confessed and repaid the money.

"He indicated to police, prosecutor, judge and his lawyers that he was proud of his being clean in this chaotic industry and he truly stuck to his principle for nearly 15 years," Jin said. "But just within a short while of two to three months, he invaded his boundary and ruined his reputation."

Hu was worried that Rio Tinto would be acquired by another company, with his position eliminated, Jin said.

Hu was 50, with a wife and children. He also tended to his ailing parents and parents-in-law, and wanted to help two childhood friends, Jin said.

He is accused of receiving two bribes: one for 1 million yuan ($146,490) and another for 5.3 million yuan ($790,000).

The Chinese government initially accused the four of stealing state secrets when they were first detained, but the charges were reduced to theft of commercial secrets several months ago.

Hu and the others were detained in July -- about a month after Rio Tinto broke off an investment deal with China state-owned Chinalco, a resources company, that was worth more than $19 billion.

The deal with Chinalco was signed in February 2009 and was awaiting a review by Australia's foreign investment board.

The deal soured as opposition party members in Australia ratcheted up their 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.