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Rio Tinto employees 'to face trial' in China

10 February 10 16:42 GMT

China has indicted four Rio Tinto employees on charges of bribery and violating commercial secrets, according to the state news agency Xinhua.

The indictment means they will now face trial. The Anglo-Australian firm has declined to comment on the report.

Australian citizen Stern Hu, Rio Tinto's lead iron ore negotiator in China, is one of the four facing trial.

Mr Hu and his Chinese colleagues Liu Caikui, Ge Minqiang and Wang Yon have been in detention since July last year.

If convicted, they could face up to 27 years in prison.

"The accused four, including Stern Hu, exploited their positions to seek gain for others, and numerous times either sought or illegally accepted massive bribes from a number of Chinese steel firms," said the prosecutor's office, as quoted by Xinhua.

"Many times they used personal inducements and other improper means to obtain commercial secrets from Chinese steel firms, causing serious consequences for the steel firms concerned."

The case has created a political and diplomatic problem for Australia's Mandarin-speaking Prime Minister Kevin Rudd, who has made improving relations with China - its biggest trading partner - a priority.

A month before the arrests, Rio scrapped a $19.5bn (£12.5bn) deal with China's state-owned Chinalco in favour of a tie-up with rival giant BHP Billiton, which angered some in Beijing.

The Australian government has not yet commented on the reports.

The BBC's Damian Grammaticus, reporting from China, said the fact senior executives could be arrested and put on trial in this way was worrying representatives of major foreign companies with bases there.

Aditya Mittal, chief financial officer of the world's biggest steel producer Arcelor Mittal, told the BBC World Service about the challenges of doing business in China.

"In China it's very important to appreciate and understand the local environment and culture," he told World Business News.

"They are nervous about foreign companies taking control of strategic assets and strategic companies. That's a continuous challenge for us."

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