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Chinese court hears case against Rio Tinto workers

Australian Consul-General Tom Connor speaks to reporters outside the Shanghai No.1 Intermediate People's Court.
Australian Consul-General Tom Connor speaks to reporters outside the Shanghai No.1 Intermediate People's Court.
STORY HIGHLIGHTS
  • After bribery hearing, court considers evidence of alleged theft of commercial secrets
  • Four employees of Rio Tinto in China are on trial after being detained in July
  • Rio Tinto has called the allegations surprising and said it was not aware of any evidence
  • Foreign news organizations were not allowed in the courtroom

(CNN) -- A Chinese court trying four employees of mining giant Rio Tinto concluded its hearing on the bribery charges against them Tuesday and began to consider evidence of their alleged theft of commercial secrets.

Australian consular officials who were allowed in the Shanghai courtroom for the bribery phase of the case were barred from witnessing the theft portion.

Foreign news organizations were not allowed in the courtroom.

Charged in the case are Stern Hu, an Australian citizen of Chinese origin who was the general manager of Rio Tinto's Shanghai office, and three Chinese employees.

At the end of the first day of the trial on Monday, Zhai Jian -- the lawyer for one of the defendants -- said his client acknowledged receiving money, but said it was a gift or a loan -- not a bribe.

It was not immediately clear whether the other three defendants also admitted taking money.

"China has a different legal system to the rest of the world. The world will be watching very closely.
--Australian PM Kevin Rudd
RELATED TOPICS
  • Rio Tinto plc
  • Australia
  • China
  • Business

Hu is accused of receiving two bribes: one for 1 million yuan ($146,490) and another for 5.3 million yuan ($790,000). The Australian Department of Foreign Affairs and Trade said he "made some admissions concerning these amounts," but did not elaborate.

"The trial is continuing and as a consequence we are not in a position to say anything further at this point," a department spokeswoman said.

The Chinese government initially accused the four of stealing state secrets when they were first detained, but the charges were reduced to theft of commercial secrets several months ago.

Rio Tinto, a British-Australian company, is one of the largest in the world. The case against it has raised fears of a government crackdown on foreign companies doing business in China.

Hu and the others were detained in July. China says the four bribed executives from 16 of the nation's major steel mills to obtain industry information.

In China, obtaining commercial secrets carries a maximum penalty of seven years in prison.

Rio Tinto has called the allegations surprising and said it was not aware of any evidence.

The detentions took place about a month after Rio Tinto broke off an investment deal with China state-owned Chinalco that was worth more than $19 billion.

The deal with Chinalco was signed in February 2009 and was awaiting a review by Australia's foreign investment board.

The deal soured as opposition party members in Australia ratcheted up their disapproval, saying it would put Australian resources at strategic risk.

Others saw the deal as an alliance that would further link resource-rich Australia with the commodities-hungry Chinese market.

Though that deal fell apart, the companies signed an agreement Friday to form a joint venture to develop an iron ore project in the West African nation of Guinea. Chinalco will pay $1.35 billion to enter the partnership.

China warned against making too much of the bribery case.

"It is just an individual business case. It should not be politicized or bring a negative impact on Australia and China relations," said Qin Gang, a foreign ministry spokesman.

But Australian Prime Minister Kevin Rudd said the case will have his full attention.

"China has a different legal system to the rest of the world," Rudd said Monday. "The world will be watching very closely."

CNN's Emily Chang contributed to this report.