July 14 (Bloomberg) -- China widened a probe into the alleged theft of state secrets by Rio Tinto Group’s employees to four Chinese steelmakers including Baosteel Group Corp. and Anshan Iron & Steel Group, Chinese newspapers reported.
The government questioned Baosteel’s former iron ore price negotiator and other industry executives, the 21st Century Business Herald said today, without citing anybody. The government is investigating Baosteel, Anshan, Laiwu Iron & Steel Group and Jinan Iron & Steel Group, China Daily reported.
China, the world’s largest buyer of iron ore, on July 5 detained four Rio executives for allegedly stealing state secrets that it said harmed the nation’s economic interest and security. Annual iron ore price talks between China and Rio Tinto, the second-biggest supplier, have stalled as the nation sought a bigger price cut than the 33 percent offered.
“The probe is giving the steel industry a warning that they should improve their awareness of professional ethics and be more self-disciplined,” said Helen Wang, a Shanghai-based analyst with DBS Vickers Hong Kong Ltd.
The industry executives who were questioned have returned to work, 21st Century reported, without naming them or indicating how many were involved. The probe is now focused on collecting evidence for the alleged theft of state secrets, and to determine the source of the leaks, the paper said, citing an unidentified person.
Widening Probe
“Any information on this should be released by the security authorities,” Zhang Wei, a media official at Shanghai- based Baosteel, said today. Baosteel, the country’s largest mill, doesn’t have any information in relation to the newspaper report, she said.
Officials of the China Iron & Steel Association are also being investigated, China Daily said, citing unidentified media reports. Shang Shanghua, secretary general at the steel association, couldn’t be reached for comment.
Liu Chuanjia, a Laiwu Steel spokesman, said he’s “unaware” executives were investigated. Liu Jingyuan, a spokesman for Liaoning-based Anshan, and Chi Caigong, board secretary at Jinan Iron & Steel Co., the listed unit of Jinan, couldn’t be reached for comment.
Chinese authorities last week said they had evidence that Rio employees, including Stern Hu, an Australian citizen and head of iron ore operations in China, stole state secrets. Rio workers had bribed employees at Chinese steelmakers, the China Business News reported last week, citing the Shanghai state security authority.
The families of Rio’s four detained employees have started the process of hiring lawyers, 21st Century said today, without citing anybody.
Chinese mills and iron ore producers are continuing the longest-running negotiations in the 40-year history of setting annual prices for the steelmaking material. China has rejected Rio’s push for a 33 percent price cut, which was agreed to by rivals in South Korea and Japan, and is a discount of as much as 45 percent to counter losses as demand drops.
