'Australians held over Laos gems'

Mr Danes is detained in the capital Vientiane

By regional correspondent Owen Bennett-Jones

The authorities in Laos have issued a statement clarifying why they detained two Australians who were working at a gem mine in the north of the country.

According to Laos national radio, Kerry Danes and his wife Kay are being investigated over the disappearance of 129kg of gems and over $52,000 from the mining company.

Mr Danes was in charge of security at a foreign-run gem mine established in Laos five years ago.

The police went to the mine in December to question him about the disappearance of the gems, which include 165 finished sapphires.

According to Laos radio, when they arrived they found Mrs Danes rushing around the office gathering documents.

The Lao statement said she was obviously in a hurry and showed no interest in what was happening to her husband.

Half an hour later she had made it to a border checkpoint, where customs officers found she was carrying $52,700 in cash and various pieces of company documentation.

The detention of Kerry and Kay Danes has been given extensive coverage in the Australian media, with various family members insisting on the couple's innocence.

Kerry Danes's father has accused the Australian Foreign Office of failing to take the case seriously and has even called for sanctions to be imposed on Laos.

The Australian ambassador in Laos has said that sanctions would probably be counterproductive.