Rio denies espionage allegations

By Hou Lei (chinadaily.com.cn)
Updated: 2009-07-17 17:31

Australian iron ore supplier Rio Tinto said Friday that, "allegations that employees were involved in bribery of officials at Chinese steel mills are wholly without foundation", according to a statement posted on the company's official website.

"We believe that they acted at all times with integrity and in accordance with Rio Tinto's strict and publicly stated code of ethical behavior," the company said.

Four employees of Rio Tinto, including Stern Hu, the head of Rio's Shanghai office, were detained in Shanghai on July 5 on charges of espionage. There are reports that detailed information about Chinese steel mills was found in computers in Rio's computers in Shanghai. Executives from all 16 Chinese steel mills participating in iron ore price talks this year had been bribed by Rio Tinto employees, an industry insider was sited by China Daily on Wednesday.

On July 5, the Chinese government began an investigation into executives of domestic steel mills to see whether they illegally disclosed secrets and took bribes from Rio. A senior executive of major steel maker Shougang Group was detained July 7 in Beijing for alleged "commercial crimes" and Wednesday's media reports indicated that a high-ranking employee from another steel maker, Laigang Group, was under investigation for "providing secrets to Stern Hu".

Reuters reported Thursday that Rio Tinto evacuated some expatriate staff in China involved in researching the iron ore and steel industry after the July 5 detentions.

Rio did not respond to that report directly but did say that it "continues to operate in China and is maintaining high levels of iron ore shipments from Australia."

Sam Walsh, head of Rio's iron ore division, said in the statement that Rio remains fully supportive of the detained employees and that "the Australian Government is keeping the company fully briefed on its efforts to assist them."

Australian Prime Minister Kevin Rudd said Wednesday that the world was watching how China handled the case and "China too has significant economic interests at stake in its relationship with Australia."

China's foreign ministry spokesman Qin Gang said in Thursday's regular press conference that the behavior of the employees of Rio Tinto had hurt China's interests.

"In this regard, I think Stern Hu and his company are clear about it and it is legal for related Chinese organizations to take measures against them," Qin was quoted as saying.

Qin also said that China welcomes foreign investment and enterprises.