Rio Tinto (ASE:RIO) Australian Executive Confesses to Accepting Bribes in China
Monday, March 22nd, 2010
With much at stake, a Rio Tinto executive confessed he had taken bribes, and now Stern Hu faces up to 20 years in prison as a result. Hu was the lead negotiator for iron ore for Rio Tinto with China.
It's hard to tell if the sentencing will take into account international relations or not, as many in Australia are watching closely to see how stiff that will be.
There has been a cloud hanging over the case because of the timing of the arrests, which had come right after the Australian government rejected a bid of $19.5 billion from Chinalco for a stake in Rio Tinto. Chinalco is a Chinese state-owned metals company.
Although some seem to have believed it was retaliation from China, it's impossible to tell, and improbable that it is true. The confession by Hu seems to indicate the evidence in the case must have been strong in order for him to admit to his guilt, although there is a part of Chinese culture which would do that for a variety of reason. Even though Hu is an Australian national, he is Chinese, which could lend to that happening. There is of course the long period of time he has been held, where he could have been convinced it was the only way to ge.
Either way, now that tensions seemed to be simmering down some, the trial seems to have lost its international edge, which probably isn't good for Hu.
For Rio Tinto, this has been a difficult time with China, as they've been working to heal the rift between the two countries, which widened over the last 6 months or so.
The concern for China is they could be viewed as hard core in this and a difficult and potentially dangerous place to do business. They can't afford that, as Russia has earned that dubious distinction, and it has had a huge impact on whether companies want to do business with them or not.
It has also caused more attention on Chinese monetary policy, which China would rather keep quieter and work behind the scenes to manage.
Article by Gary B
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
Tags: australia business , china , rio tinto
• China to abandon one child policy
• Lower Chinese PMI further weakens the Australian dollar
• G20 Focuses on Exchange Rate Volatility
• Dow Up for Third Consecutive Week
• Goods and Services Price Split Keeping Inflation in Check
• China Anticipated to Test Relaxed Deposit Rates
• US Treasury and the China Currency Manipulation War
• Nyrstar May Forego Expanding in Australia Because of Super Tax
• China and India Increase Voting Rights in World Bank
• Sigma Pharmaceuticals CEO Quits After Terrible Annual Results
• Are Copper Prices Ready to Fall as Investor Interest Slows?
• General Electric (NYSE:GE) in "Country to Company" Relationship to China
• World Steel Association Furious Over BHP Billiton (ASE:BHP) and Rio Tinto (TSE:RIO) and Vale SA Contract Changes
• Australian Foreign Minister Stephen Smith Says Verdict against Rio Tinto's (ASE:RIO) 'Hu' Could Harm Business Ties
• Telstra (ASX:TLS) in Turmoil as CEO David Thodey Takes Charge
• What is NASDAQ index?
• Should i invest in international stocks?
• Where to buy bearer bonds?
• Can i get a loan online?
• What is california property tax?
• Which are the best car insurance compani...
• Where in Sao Paulo is the best location ...
• Which are the best mortgage brokers in S...