A Chinese court convicted four employees of mining giant Rio Tinto including an Australian national on Monday on bribery and trade secrets charges, handing down jail terms ranging from seven to 14 years.
Australian executive Stern Hu and three Chinese staff, who were tried last week in Shanghai, were convicted of accepting bribes totalling around $13 million dollars and stealing trade secrets.
Hu, the head of the Anglo-Australian miner's Shanghai office, was sentenced to 10 years in prison. His Chinese colleagues Wang Yong, Ge Minqiang and Liu Caikui were given jail terms of 14, eight and seven years, respectively.
Australia slammed the "very tough" bribery sentence handed out to Hu and said there were "serious unanswered questions" about the industrial spying part of the trial.
"On any measure this was a very tough sentence. It's a tough sentence by Australian standards," Foreign Minister Stephen Smith told reporters.
Australian Prime Minister Kevin Rudd has said the world is watching the trial, which has been widely seen as a test of the rule of law in China and has sparked concerns about doing business in the world's third-largest economy.
Three decades after China opened up to the world, US and European businesses are now complaining of increasingly onerous rules, preferential treatment for local firms and growing nationalism.
Australia's Consul General in Shanghai, Tom Connor, summarised the sentences after the hearing but declined to comment further, saying Foreign Minister Stephen Smith would make a more detailed statement later Monday.
The four defendants had pleaded guilty to taking money, and one had admitted to commercial espionage, but the accused had disputed aspects of the charges, their lawyers said.
A prosecutor had recommended that Hu be given a lenient sentence after he apologised to the court and to Rio, saying he took more than $900,000 to help childhood friends in need, his lawyer Jin Chunqing said.
But the court found that the four had stolen trade secrets including the minutes of a China Iron and Steel Association meeting and information on Chinese steel giant Shougang's output.
The defendants appeared before the court in civilian clothing, with Hu wearing a blue windbreaker. His normally black hair was white.
Hu also was fined 500,000 yuan ($73,250) and had another 500,000 yuan worth of personal assets confiscated, the court said.
Liu's lawyer, Tao Wuping, said his client was likely to appeal. The Australian's defence team said they needed to discuss the verdict with their client.
The four Rio employees were arrested last July during contentious iron-ore contract talks between top mining companies and the steel industry in China, the world's largest consumer of the raw material. The talks collapsed.
At the three-day trial of the Rio employees, the court heard evidence that millions of yuan in bribes had been stuffed into bags and boxes for the accused, according to state media.
Hu took money from small private steel companies, which before the global financial crisis were locked out of buying iron ore from Rio because the mining giant prioritised large state-run steel companies, Jin said.
When the global economic crisis hit in September 2008, demand for iron ore plummeted and the smaller players paid bribes "to squeeze into the club and join the buyers", he said.
Wang strongly objected to the bribery allegations, saying he simply borrowed the money from one of China's richest men, Du Shuanghua, the National Business Daily said.
Du, the former head of Shandong-based Rizhao Iron & Steel group, has contradicted Wang's account, saying he paid the Rio employee $9 million for preferential treatment, the newspaper said.
Smith chastised China last week for locking the country's diplomats out of the courtroom during the hearings on the commercial espionage allegations.
China appeared to have broken its own laws by excluding Australia's consular staff from the hearings, according to New York University professor Jerome Cohen, a leading US expert on Chinese legal issues.
The decision "to exclude the Australian consuls violated existing Chinese law, which since 1995 has explicitly instructed China's courts to permit foreign consular representation even at non-public trials", Cohen wrote in an article co-authored with Yu-Jie Chen, a fellow at the US Asia Law Institute.
"There had been an expectation that the Chinese legal system was becoming more transparent and accountable," said Ann Kent, a visiting fellow at the Australian National University College of Law.
"On the evidence to date, this trial has not met these expectations."