MacRoberts Technology Media & Communications e-update 29/03/10

BRIBING RIO TINTO EXECUTIVES SUFFER CHINESE LIBERTY TAKEAWAY

A Chinese court has found four employees of mining company, Rio Tinto, guilty of bribery and theft of trade secrets. The employees received jail sentences ranging from seven to fourteen years. Furthermore, substantial fines were also imposed and assets belonging to the employees were confiscated. Lawyers for the men said they were surprised by the severity of the sentences and that it was likely there would be an appeal.

The employees, including one Australian national, were arrested last July during contentious discussions between mining companies and the steel industry in China regarding iron ore contracts. They were accused of accepting thirteen million dollars in bribes and stealing trade secrets which included the minutes of a China Iron and Steel Association meeting and information on China steel giant Shougang's output.

All four employees pled guilty to receiving bribes but contested the amounts. Only one defendant pled guilty to infringing commercial secrets.

Although access to the trial was limited - Australian diplomats were allowed access but were barred from the commercial secrets part of the trial and foreign reporters were barred from the whole trial - it has been of great interest worldwide and has been closely watched as an example of the application of anti-corruption laws in China. The Australian government has called the verdict harsh, as have Western business executives.

This case serves as a reminder that bribery is a big issue worldwide and the consequences are becoming increasingly serious. The UK government are currently seeking to implement new bribery legislation providing it can be finalised before the election. The UK legislation is intended to have far-reaching jurisdiction in order to cover bribery offences associated with UK companies but taking place outwith the UK. Despite the lack of transparency in the trial, this decision highlights the fact that China does not take bribery offences lightly and indicates that they may in fact welcome the new UK legislation.

For further information, please contact David Flint or Valerie Surgenor on 0141 303 1100.

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