Bad boys, bad boys, what'cha gonna do?

David Barboza has the story in The New York Times:

Four employees of the British-Australian mining giant Rio Tinto, including an Australian citizen, were convicted by a Chinese court Monday of accepting millions of dollars in bribes and stealing commercial secrets. They were sentenced to seven to fourteen years in prison, and the company said the four would be fired immediately. Rio Tinto, which until Monday had defended its employees, said the court’s evidence showing that they had accepted about $13.5 million in bribes in recent years was “beyond doubt”.
Stern Hu, the Australian citizen who served as general manager of Rio Tinto’s Shanghai office, was sentenced to seven years in prison for bribery and five years for stealing commercial secrets. Although the court reduced his total time to be served to ten years, it is still one of the stiffest sentences ever handed down against a high-ranking executive of a multinational company here. He was also fined 1 million yuan, or $146,500.
Although Rio Tinto was not charged in the case, the Shanghai No. 1 Intermediate People’s Court said the company had profited from stolen information that harmed Chinese economic interests, costing steel mills in China an extra $150 million last year.
Between 2003 and 2009, the court said, the four defendants had used “improper means” to gain information that allowed Rio Tinto to “jack up the price that China paid for its iron ore imports”. The court said that it would soon charge at least two Chinese steel industry officials with passing secrets to Rio Tinto.
The verdict is almost certain to increase diplomatic tensions between Australia and China and cast a pall over Rio Tinto’s operations here. Rio Tinto is one of China’s biggest suppliers of iron ore, and every year China imports tens of billions of dollars worth of the material to make steel for its fast-growing economy.
After the verdict, Australia’s foreign minister, Stephen Smith, called Mr. Hu’s seven-year sentence on bribery charges “very harsh”, according to The Associated Press. Rio Tinto released a separate statement that said it could not comment on the trade secrets charges because that part of the trial had been closed to the public. But Sam Walsh, chief executive of the company’s iron ore division, called the employees’ bribe-taking “deplorable behavior” clearly at odds with the company’s ethical guidelines.
And Tom Albanese, Rio Tinto’s chief executive, said he was “determined that the unacceptable conduct of these four employees will not prevent Rio Tinto from continuing to build its important relationship with China”.
At a three-day trial that took place in Shanghai early last week, the four employees all pleaded guilty to accepting some bribes, though several of the men denied having stolen commercial secrets, according to lawyers in the case. Proceedings of the trial were largely closed to the public and the international media. Lawyers for the four defendants said several of them were trying to decide whether to appeal the verdicts.
In addition to Mr. Hu, three Chinese employees of Rio Tinto were charged: Wang Yong, Ge Minqiang and Liu Caikui. Mr. Wang was sentenced to fourteen years in prison, Mr. Ge to eight years and Mr. Liu to seven years. They were also fined hundreds of thousands of dollars.
The Rio Tinto case drew international attention because of concerns that the four employees had been arrested on trumped-up charges and worries about whether they could get a fair trial. The four were initially arrested last July on suspicion of espionage and stealing state secrets from Chinese state-owned steel companies.
But, after protests from Australian officials and foreign executives about the nature of the accusations, the men were formally accused of bribery and stealing commercial secrets, which are lesser charges.
Some Australian officials and foreign executives said the arrests looked like retaliation against Rio Tinto because of its tough negotiations over iron ore prices with Chinese state-run steel mills. Shortly before the arrests, the company had also scrapped plans to accept a $19.5 billion investment from one of China’s biggest mining companies.
China’s steel industry association had accused Rio Tinto and other foreign iron ore suppliers of driving up the price of ore and negotiating unfairly. Chinese officials, though, have insisted this was a legal case and should not be “politicized”.
While some legal experts have complained about the legal process and transparency in the case, others say the sentences were fair, considering how huge the bribes were and how much the trade secrets may have cost China. “The Rio Tinto case is sending a signal to the world that China’s model of managing its financial activities has changed,” said Liu Junhai, a law professor at Renmin University in Beijing. “In the past, we overemphasized the country’s development, but didn’t pay enough attention to regulation.”