PAPER OF SENTENCE

SHANGHAI FIRST INTERMEDIATE PEOPLE’S COURT OF P.R. CHINA

(2010)Preliminary sentence. No. 34. First intermediate people’s Court. Shanghai

Public prosecutor: First Procuratorate of Shanghai P.R. China

Defendant HU SHITAI(Chinese name 胡士泰, the Australian Federal nationality, Passport number E3021895): Male; Born in Tianjing on Nov. 22, 1956; Postgraduate degree; Chief representative of Shanghai office of Singapore Rio Tinto Iron Mine Asia Co., Ltd(hereafter referred to as Rio Tinto Singapore Company); He used to be chief representative of Shanghai office of Australian Rio Tinto Co., Ltd(hereafter referred to as Rio Tinto Company); Lived in Garden Villa K3, Xijiao Hotel Hongqiao Road No.2605, Shanghai. HU was detained on July 5 2009 and was arrested on Aug. 11 2009; Now, he is detained in Shanghai Detention House.

Defender Shi Keqiang, Shanghai Erli Law Firm.

Defender Jin Chunqing, Jiangsu Fangben Law Frim.

Defendant Wang Yong: Male; Born in Rizhao city, Shangdong province on Jan. 13, 1969; Han nationality; University education background; Sales manager of Shanghai office of Australia Robe(China) Co., Ltd(hereafter referred to as Robe company); He used to be sales director of this office; Registered residence place: Domitory building of Jinan Iron and Steel Factory, Shandong province; Lived in Room 12A04, Dagu Road No.186-2, Huangpu District, Shanghai; Wang was detained on July 6 2009 and was arrested on Aug. 11 2009; Now, he is detained in Shanghai Detention House.

Defender Zhang Peihong, Shanghai Zhaijian Law Firm.

Defender Yang Bailin, Shanghai Huazun Law Frim.

Defendant Ge minqiang: Male; Born in Shanghai city on June 8, 1975; Han nationality; Postgraduate education background; Sale manager of Shanghai office of Rio Tinto Singapore company; Ge used to be sales manager of Beijing office of Rio Tinto company; Registered residence palce: No. 209, South Chongqing Road, Luwan District, Shanghai; Lived in Room 302, Kangding Road 445 No.15, Jingan District, Shanghai; Ge was detained on July 6 2009 and was arrested on Aug. 11 2009; Now, he is detained in Shanghai Detention House.

Defender Zhai Jian and Zhouqi, Shanghai Zhai Jian Law Firm.

Defendant Liu Caikui: Male; Born in Tianjin on Dec. 15, 1978; Hui nationality; Graduate education background; Sales director of Shanghai office of Rio Tinto Singapore company; Liu used to be Sales director of Shanghai office of Rio Tinto company; Registered residence place: No. 302, Gate 2, Ruili Garden No.2, Baoshan Road, Tianjin; Lived in Room 1402, Second Rihui Village, Xuhui District, Shanghai; Liu was detained on July 6 2009 and was arrested on Aug. 11 2009; Now, he is detained in Shanghai Detention House.

Defender Tao Wuping and Zhao Hexuan, Shanghai Shenda Law Firm

By complaint bill No. (2010)10, first procuratorate of Shanghai accused the defendant HU SHITAI, Wang Yong, Ge Minqiang and Liu Caikui guilty of non-state staff accepting bribes and violating commercial secrets, and initiated prosecution to the court on Feb. 10, 2010. The court formed a collegiate bench, held an open trial for the charge of non-state staff accepting bribes, and held a private trial for the charge of violating commercial secrets because this part of trial related to commercial secrets and the right-sholder asked it to be private. First procuratorate of Shanghai assigned procurator Hewei and acting procurator Xiaoyun and Hu Chunjian to support the prosecution. Defendant HU SHITAI and his defender Shi Keqiang and Jin Chunqing, defendant Wangyong and his defender Zhang Peihong and Yang Bailin, defendant Ge Minqiang and his defender Zhaijian and Zhouqi, defendant Liu Caikui and his defender Tao Wuping and Zhao Hexuan attended the trial. Since the defendant HU SHITAI is familiar with Chinese language and presented a written notice to our court for not requiring an interpreter, our court decided not to provide any interpreter. In the process of this trial, trial period was extended a month, which was approved by Shanghai Higher People’s Court. Now, the trial is completed.

Frist procurtorate of Shanghai accused:

A. Crime of non-state staff accepting bribes

(a) From 2008 to early 2009, defendant HU SHITAI was chief representative of Shanghai office of Rio Tinto Singapore company, and was responsible for selling iron ore in China and developing long-term sales agreement(hereafter referred to as Changxie) client. He used the above duty convenience to obtain profit for relevant units and illegally accepted one million Yuan from Li Huiming(handled seperetely) of Hebei Jingye Iron and Steel Co., Ltd.(hereafter referred to as Hebei Jinye company), 798700 USD(equivalent to RMB 5462400 Yuan) for HK Guofeng Enterprise Development Co., Ltd., which is affiliate company of Hebei Tangshan Guofeng Iron and Steel Co., Ltd.(hereafter referred to as Tangshan Guofeng company). Totally, the above money is equivalent to RMB 6462400 Yuan.

(b) From 2003 to June 2009, defendant Wangyong was sales director and manager of Shanghai office of Robe company, and was responsible for selling iron ore in China. He used the above duty convenience to obtain profit for relevant units and illegally accepted or asked three million Yuan from Zhang Xiangqing(handled seperately) of Tianjing Rongcheng United Iron and Steel Group Co., Ltd.(hereafter referred to as Tianjing Rongcheng company), nine million USD(evuivalent to RMB 65.2149 million Yuan) and RMB three million Yuan from Du Shuanghua(handled seperately) of Shandong Rizhao Iron and Steel Holding Group Co., Ltd.(hereafter referred to as Rizhao Iron and Steel company), 115800 USD(equivalent to RMB 791600 Yuan) from Bai Wenhui(handled seperately) of Shandong Huaxin Industrial and Trade Co., Ltd.(hereafter referred to as Shandong Huaxin company), 385400 USD(equivalent to RMB 2.6333 million Yuan) from Wang Dongsheng(handled seperately) of Shandong Rizhao Zhongrui Product Co., Ltd.(hereafter referred to as Rizhao Zhongrui company), RMB 500000 Yuan from Zhangqi(handled seperately) of Hebei Puyang Iron and Stell Co., Ltd.(hereafter referred to as Puyang Iron and Steel company). Totally, the above money is equivalent to RMB 75.1443 million Yuan.

(c) From 2007 to June 2009, defendant Ge Minqiang was sales manager of Rio Tinto company Beijing office and Rio Tinto Singapore company, and was responsible for selling iron ore in China. He used the above duty convenience with others to obtain profit for relevant units and illegally accepted RMB 2.12 million Yuan and 437000 USD(euqivalent to RMB over 2.9982 million Yuan) from SINOCHEM INTERNATIONAL CO.(hereafter referred to as Sinochem International), within which Ge accepted RMB 350000 Yuan and 400000 HK dollars(equivalent to RMB 352900 Yuan); accepted RMB 300000 Yuan from Li Huiming of Hebei Jingye company, within which Ge accepted RMB 200000 Yuan; Accpeted RMB 600000 Yuan from Jiang Chaoying, within which Ge accepted RMB 300000 Yuan; accpeted 135900 USD(equivalent to RMB 927100 Yuan) form Wuxiang(handled seperately) of China National Building Materials & Equipment Import & Expoort Corporation(hereafter referrred to as CNBM International), within which Ge accepted RMB 400000 Yuan. Totally, the above money Ge accepted with others is RMB 6.9453 million Yuan.

(d) From 2007 to July 2009, defendant Liu Caikui was sales director of Rio Tinto company Shanghai office and Rio Tinto Singapore company Shanghai office, and was responsible for selling iron ore in China. He used the above duty convenience to obtain profits for relevant units and illegally accepted RMB 200000 Yuan from Guan Shusheng(handled seperately) of Henan Anyang Baotaiying Business and Trade Co., Ltd.(hereafter referred to as Anyang Baotaiying company), RMB 300000 Yuan from Zhangrui(handled seperately) of Shanxi Jianbang Group Co., Ltd.(hereafter referred to as Shanxi Jianbang company), 150000 USD(equivalent to RMB 1.0289 million Yuan) from Gaoxiang(handled seperately) of HK Pan-asia Mine Co., Ltd.(hereafter referred to as Pan-asia company), RMB 390000 Yuan from Guo Quande(handled seperately) of Shanxi Antai Group Co., Ltd.(hereafter referred to as Shanxi Antai company), 40000 USD(equivalent to RMB over 273400 Yuan) from Huangmin(handled seperately) of Shanghai Mingfuqing International Trade Co., Ltd.(hereafter referred to as Shanghai Minfuqing company), 20000 USD(equivalent to RMB 136500 Yuan) from Li Xiaopeng(handled seperately) of HK Laibao Materials Co., Ltd.(hereafter referred to as HK Laibao company), an omega watch which worth RMB 137600 Yuan from Caowei(handled seperately) of Shandong Wanbao Trade Co., Ltd.(hereafter referred to as Shandong Wanbao company), RMB 150000 Yuan from Zhang Xianghai(handled seperately) of Shangdong Guangfu Group Co., Ltd.(hereafter referred to as Shangdong Guangfu company), RMB 900000 Yuan from Liqiang(handled seperately) of Shanxi Jincheng Fusheng Iron and Steel Co., Ltd.(hereafter referred to as Jincheng Iron and Steel company), RMB 270000 Yuan from assistant manager Gong Yuanyuan(handled seperately) of Shandong Chuanyang Group Co., Ltd.(hereafter referred to as Shandong Chuanyang company). Totally, the above money is equivalent to RMB 3.7864 million Yuan.

In July 2009, defendant HU SHITAI, Wangyong, Geminqiang and Liu Caikui Confessed the above crimes, which was not known to the investigative organization.

II. Crime of Infringing on Business Secrets

From April 2005 to June 2009, defendants Hu Shitai, Wang Yong, Ge Minqiang and Liu Caikui have obtained business secrets of Chinese steel enterprises for many times by bribery and other illegal means through Tan Yixin, general manager of China Shougang International Trade & Engineering Corp. (hereinafter abbreviated as Shougang International Trade Corporation) (which shall be judged in separate case), Wang Hongjiu, manager of international shipping department of Shandong Laigang International Trade Co., Ltd. (hereinafter abbreviated as Laigang Company) (which shall be judged in separate case) and others in order to get more sales profits for Lituo Company and seek for higher positions and personal benefits. Details are listed as follows:

At the night on April 18, 2005, defendant Wang Yong got information related to the meeting on iron ore import negotiation held in Wuxi, Jiangsu by China Iron & Steel Association (hereinafter abbreviated as CISA) from Fang Zeshan, director of foreign trade department of Shandong Shiheng Special Steel Group Corporation （hereinafter abbreviated as Shandong Shiheng Special Steel Company）(which shall be judged in separate case) and provided such information to the chief representative of Shanghai Representative Office of Luobo Company at the next day.

On November 29, 2005, defendant Hu Shitai obtained such information, previously provided by Tan Yixin to Wang Lizhong, chief representative of Beijing Representative Office of Hamersley (China) Co., Ltd. of Australia (hereinafter abbreviated as Hamersley China) (which shall be judged in separate case), from Wang Lizhong that Shougang International Trade Company and BHP Billiton Ltd. would negotiate the purchasing price of iron ore.

On January 17, 2008, under the instruction of Hu Shitai, defendants Ge Minqiang and Wang Yong provided information on the meeting held by CISA in Nanning, Guangxi about taking measures for providing stock to Chinese market by Lituo Company obtained from Shen Qiang, director of commercial operation section of Hebei Handan Steel Group Co., Ltd. (hereinafter abbreviated as Handan Steel Company) (which shall be judged in separate case), and others to Hu Shitai. Ge Minqiang also asked for relate materials about above meeting from Shen Qiang on January 21, 2008.

At the afternoon on October 19, 2008, defendant Liu Caikui provided related information on production & management seminar of CISA and output reduction of Shougang International Trade Company obtained by him to Hu Shitai.

In the middle of December 2008, defendant Hu Shitai instructed his employee to collect related information on CISA meeting. On December 18, defendant Ge Minqiang obtained information on CISA meeting held on December 17 about the issuance price of letter of credit in 2009 at Jiangsu Shagang Group Co., Ltd. (hereinafter abbreviated as Jiangsu Shagang Company) from Li De, sales supervisor of Shanghai Representative Office of Lituo Singapore Company (which shall be judged in separate case), and provided such information to Hu Shitai at the next day.

At the last 10 days of April, 2009, Hu Shitai instructed employees of the representative office to collect the iron ore certificate issuance of CISA in 2009. In the morning on April 29, Liu Caikui asked for copies of Notice on Certificate Issuance for Commercial Contract on Iron Ore Import of CISA from Wang Hongjiu of Laigang International Trade Company and provided it to Hu Shitai at that day. Hu Shitai provided such document to the chief negotiation representative of Lituo Company.

At the night on June 8, 2009, defendant Hu Shitai instructed Ge Minqiang to arrange an interview with Tan Yixin for him, and obtained related information on CISA meeting about iron ore import negotiation held in the afternoon of that day from Tan Yixin, and provided such information to the chief negotiation representative of Lituo Company at the next day.

In the afternoon on June 17, 2009, defendants Hu Shitai and Wang Yong obtained information on negotiation of iron ore import price between CISA and VALE of Brazil (hereinafter abbreviated as VALE) held in June, 2009 respectively, and provided such information to senior managers of Lituo Company.

Such behaviors of defendants Hu Shitai, Wang Yong, Ge Minqiang and Liu Caikui impacted and damaged the competition benefits of Chinese steel enterprises greatly, got them into disadvantaged position in the negotiation for importing iron ore, and resulted in the abrupt interruption of negotiation on iron ore price between Chinese steel enterprises and Lituo Company in 2009. Chinese steel enterprises suffered great economic losses for that. More than 20 companies, including Shougang International Trade Company and Laigang International Trade Company, have paid an excessive advance payment of 1.018 billion RMB. The interest losses have amounted to 11,703,000 RMB only in the latter half year of 2009.

The public prosecution authority provided the following evidences to support above charges: testimonies of witnesses Fang Zeshan, Shen Qiang, Du Shuanghua and Li Tao, e-mails, assets assessment reports, judicial authentication letters and other documented evidences, authentication conclusions and confessions of defendants Hu Shitai, Wang Yong, Ge Minqiang and Liu Caikui.

According to these evidences, it is believed by the public prosecution authority that defendants Hu Shitai, Wang Yong, Ge Minqiang and Liu Caikui took their duty convenience to seek for benefits for others, have asked for or received huge amount of illegal gains; Hu Shitai, as the chief leader, Wang Yong, Ge Minqiang and Liu Caikui, as other direct responsible leaders sought for business secrets through bribery and other illegal means, which has resulted in serious impacts. The behaviors of above defendants has violated Article 163, clause 1.1 of Article 219, Article 220 of the Criminal Law of the People’s Republic of China and it shall claim against them for criminal liabilities for bribery crime of non-national officials, crime of infringing business secrets. For charge on bribery crime of non-national official, Hu Shitai, Ge Minqiang and Liu Caikui surrendered voluntarily. Wang Yong denied main facts of crime at court, which shall not be deemed as voluntary surrender by law.