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Another Chinese executive taken in Rio case

ANOTHER executive from a major China steel producer is under investigation for his role in the commercial espionage case involving the world's second-largest iron ore miner, Rio Tinto.

Wang Hongjiu, an executive with China's sixth largest steel mill, the Laigang Group in Laiwu City in eastern Shandong Province, was taken into custody by police investigating the Rio case, a colleague confirmed to today's Securities Daily.

Tan Yixin, an executive of Shougang Group in Beijing, was taken into custody by police days earlier.

Laiwu prosecutors said Wang's case was still "classified", according to the report, but media speculates their arrests were linked to Rio Tinto's alleged bribery in China.

Wang could not be reached for comments.

Both Tan and Wang were top officials in China's state owned steel group that was a part of the iron ore price negotiations.

Wang was in charge of ocean shipping in Laigang, which requires close contacts with the foreign mining giants.

The two were believed to "have offered commercial secrets" to Stern Hu, one of the four Rio employees who have been charged for business espionage in China, according to the report.

The charging of the four has sparked nationwide discussion over China's commercial security.

The probe has widened since then, with the Chinese government investigating executives of domestic steel mills for leaking information to Rio.

Rio insists its employees are ethical and had done nothing illegal. The company withdrew its steel section employees from China days after its employees were taken by the police, according to Phoenix

Du Qihua, professor of the Capital University of Economics and Business, said the alleged bribery in the Rio case is typical of China, where under table deals are deeply rooted and demand for iron ore is soaring.

Du called for authorities to strengthen commercial security and said the investigation of Wang and Tan was an indication the Chinese government is trying to clean up trade.


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