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Intellectual Property Law

: Womble Trade Secrets Blog

Hu's On First: Three-Day Rio Tinto Criminal Prosecution Concludes - Four Plead Guilty to Accepting Bribes, Verdict Pending

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The New York Times is reporting that the three-day trial of four employees of the British-Australian mining giant Rio Tinto ended here Wednesday afternoon, but there was no verdict on charges that the group had accepted millions of dollars in bribes from Chinese steel companies and had stolen commercial secrets.

The defendants face 5 to 15 years in prison, if convicted.

A three-judge panel is expected to rule in days or weeks on the high-profile case, which is being closely followed by foreign companies with operations in China.

The four Rio Tinto employees, including Stern Hu, an Australian national, pleaded guilty to accepting money that prosecutors have deemed bribes.

Rio Tinto says it has no evidence its staff engaged in any wrongdoing.

But the confessions Monday, the first day of the trial, complicated a case that began last July, when the authorities in Shanghai detained the four men on suspicion of espionage and harming China?s economic interests under the country?s tough state secrets law.

Lawyers involved in the case have offered often contradictory accounts of what took place in court this week, of who pleaded guilty and whether their clients accepted bribes.

Prosecutors charged the four with receiving about $12 million in bribes.

But lawyers for the defense said their clients had accepted much less and that some of the money was unrelated to Rio Tinto, like a loan used to invest in stocks.

?Liu Caikui pleaded guilty but he said part of the bribe that he was accused of taking was actually commission,? his lawyer, Tao Wuping, said after a court session.

Tom Connor, the Australian consul general in Shanghai, said outside the court Monday that Mr. Hu, one of Rio Tinto?s highest-ranking executives in China, had been accused of two counts of bribery, accepting payments of $147,000 and $790,000.

Mr. Connor said that during the trial, Mr. Hu had ?made some admissions? about taking money.
Now, the three judge panel will decide how much time the four Rio employees will serve for pleading guilty to taking at least some money.

The defendants almost certainly face convictions for bribery, but only one pleaded guilty to the more controversial charge that they illegally obtained commercial secrets, a charge that could imply the involvement of their employer, Rio Tinto.

Lawyer Zhang Peihong told The Age the defendant who pleaded guilty was ''definitely not'' Hu. He told another reporter that it was not his own client, Wang Yong, either.

The commercial secrets proceedings are controversial because they were conducted behind closed doors, with Australian diplomat observers refused entry, and because they involve laws that are notoriously vague and inconsistently applied.

Defense lawyer Tao Wuping said the business secrets allegedly stolen by the Rio Tinto employees were straightforward commercial information.

''The case is not as complicated as the public may think,'' he said.

Full post as published by Womble Trade Secrets Blog on March 24, 2010 (boomark / email).