Rio Tinto executives lose appeal in Chinese court
A Shanghai court has rejected the appeals of three former Rio Tinto employees against their sentences for corruption.
The report, from the Xinhua news agency, said the Higher People’s Court of Shanghai threw out the pleas by Wang Yong, Ge Minqiang and Liu Caikui.
They, and an Australian citizen, Stern Hu, were convicted in March for commercial espionage and taking bribes.
Source: BBC News, May 17 2010
- Rio Tinto did support the executives for a long time, until it was clear in public that they had really committed fraud. Initially many people in industry expected China was merely trying to frustrate Rio Tinto. Once the wrongdoing of the traders became clear Rio Tinto decided to dismiss them.
- The executives were taking bribes from small steel companies that were trying to evade following the yeraly benchmark pricing agreements for iron ore.
- The executives made use of the very intransparent yearly pricing system in their illegal activities. It will be harder in the new quarterly system to use illegal shortcuts.
- Although corporate reputation has certainly taken a hit, Rio Tinto has not announced far-stretching measures to improve the internal controls system in order to prevent similar practices in the future.
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