The decision by a Chinese court to sentence former Rio Tinto executive Stern Hu to 10 years in jail after being found guilty of accepting bribes and stealing secrets has been met with disappointment in Australia from entrepreneurs and members of Parliament.
The Shanghai Intermediate People’s Court announced yesterday that Hu and three of his colleagues, who are all Chinese citizens, would see jail time for their crimes.
Kogan Technologies founder and chief executive Ruslan Kogan, who conducts much of his company’s business in China, says he is disappointed with the trial, and that he is no longer considering investing in the country.
“I don’t think there is any current tension between companies at the moment, from Australia to China, but I did at one stage consider investing in China but once this case came along I’m not thinking about it all. The trial just shows they aren’t a free market.”
“I actually just came back from China… it was all pretty well hidden there, didn’t hear a word about it. I don’t know too much about the decision, but I do know that if they want to trial and prosecute someone, it should be made public. What is the evidence? We need to see it… we need to be kicking up a huge fuss about it.”
The limited access to the trial has been a point of contention between the Australian and Chinese Governments, with the former requesting access to hearings behind closed doors.
Some MPs and law experts, including Greens leader Bob Brown, have spoken out against the trial, criticising China’s legal system and saying Hu should be brought to Australia.
“It’s a huge sentence,” Brown told The Age.”Australians should be concerned… the legal system there is corrupt.”
Hu, an Australian citizen, was arrested last year on suspicion of taking bribes and stealing commercial secrets, stretching the diplomatic ties between Australia and China. While Hu pleaded guilty to accepting bribes, he disputed the $1 million amount that was alleged by his prosecutors.
The four employees were arrested last July in the middle of contract discussions between Rio Tinto and the steel industry in China regarding iron ore contracts. News of the arrests resulted in the discussions being postponed.
It was heard that Hu took money from small steel companies, which were locked out of discussions. When the global financial crisis struck in late 2008, demand for iron ore fell and these companies paid Hu in order to join the negotiations.
His sentence was comprised of a seven year jail term for accepting the bribes, and five years for stealing secrets, of which 10 years must be served. A fine was also handed down of about $75,000.
Rio Tinto, which had formerly defended its employees through the court process, released a statement saying it had decided to fire the four employees and that it was “beyond doubt” they had accepted millions in bribes.
Following the decision, foreign minister Stephen Smith told reporters the sentence was “tough”, but that there was substantial evidence available Hu was guilty.
”Australian officials… had access to this part of the trial and the advice I have is that in addition to Stern Hu’s own admissions there was other evidence which drew Australian officials to the conclusion that acts of bribery had occurred.”
Smith has been involved in negotiations with Chinese officials regarding access to the trial. While Australian officials were permitted access to parts of the court process, officials were blocked from accessing certain hearings – a point of tension between the two countries.
Smith said officials were not involved in hearings discussing the matter of stolen secrets, and that this matter was “regrettable”.
”As a consequence of that I think there are various unanswered questions which go to that part of the trial and go to that matter as far as Stern Hu is concerned… China has missed a substantial opportunity. This was an opportunity for China to bring some clarity to the notion or the question of commercial secrets,” he said.
Smith has also defended the Government’s handling of the trail, telling ABC radio that, “We are very strongly of the view that appropriate, strong and sensible representations were made at all key points of this process”.
Some MPs and law experts, including Greens leader Bob Brown, have spoken out against the trial, criticising China’s legal system and saying Hu should be brought to Australia.
While Hu and his colleagues have a chance of an appeal, it has been said a successful result would be unlikely.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
