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TRADE WARS
Australian Rio Tinto exec made mistake: lawyer

Who's fault?
by Staff Writers
Shanghai (AFP) March 26, 2010
An Australian mining executive charged with bribery and corporate espionage in China was an honest man who made a mistake, his lawyer said Friday, ahead of a verdict in the highly sensitive trial.

After hearing Rio Tinto employee Stern Hu's testimony this week, a prosecutor recommended the court give a lenient sentence to the head of the mining giant's Shanghai office, his lawyer Jin Chunqing told AFP.

Hu pleaded guilty to taking two bribes totalling more than 900,000 dollars, Jin said, but declined to say how Hu pleaded to stealing trade secrets charges.

"He couldn't believe he took the two amounts between December 2008 and January 2009 -- he felt like he was pushed by ghosts," the attorney said.

"Industry insiders, including those in the steel companies respected him for his purity. But his incorruptible reputation built over 15 years at Hamersley Iron and Rio Tinto was ruined within two months."

Jin said his client had made a "sincere apology," especially to Rio Tinto.

"He is very penitent, which I believe is sincere," the lawyer said.

The Shanghai court will deliver its verdict in the case on Monday at 2:00 pm (0600 GMT), and Australia has said consular officials would be in the courtroom to hear the decision against Hu and three Chinese colleagues.

Australian Prime Minister Kevin Rudd said the world was watching the trial, which has been widely seen as a test of the rule of law in China and has raised questions about doing business in the world's third-largest economy.

Jin said Hu had cooperated with both police and prosecutors and did not contest the bribery charges in court.

Hu was approached by smaller private steel companies, who before the global financial crisis were locked out of buying iron ore from Rio because the Anglo-Australian miner prioritised large state-run steel giants, Jin said.

"Chinese steel companies can be divided into three categories that make up the chaotic iron ore market," he said.

At the top are huge state firms such as Baosteel and Shougang, who buy massive volumes from Rio, and in the middle are smaller state steelmakers, Jin said.

"Then come the miserable private ones, which have few opportunities. They wanted to build up relations with Rio," the lawyer said.

When the crisis hit in September 2008, demand for iron ore plummeted, and "the smaller and medium-sized companies thought they finally had an opportunity to squeeze into the club and join the buyers," Jin said.

Hu told the court he had accepted the larger of the two bribes, 790,000 dollars, from one of the smaller firms to help two childhood friends in need.

"He is a person of great personal loyalty... these two had no wives and one of them was leading a hard life -- therefore, he thought he should take this opportunity," Jin said.

"The money was mostly to help others ... though not all the money," the attorney said.

He described his client as a dutiful son who was caring for his parents and in-laws, who were all in their 80s.

"The prosecutor, fairly and uniquely, responded to my points positively, saying, 'Stern Hu should receive lenient treatment on the bribery issue," Jin said.

The four were arrested in July during contentious iron ore contract talks between top mining companies and the steel industry in China, the world's largest consumer of the raw material. Those talks collapsed.

Under Chinese law, the toughest sentence for non-government officials convicted of accepting bribes is 15 years in prison, while the maximum penalty for stealing commercial secrets is seven years, according to defence lawyers.



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