Former Chinalco boss sent to prison for 16 years
A Chinese court has sent a strong message to corporate executives who have been seeing playing fast and loose within the rules of boon-times capitalism in China.
Sun Zhaoxue, the former president of state-owned enterprise Chinalco, was found guilty of graft and corruption and sentenced to 16 years in prison. The sentence was handed down by The Tieling Municipal Court Intermediate People’s Court, which found that Sun "had amassed a fortune in property through corruption during his lengthy time in the Chinese resources and commodities industry," The Australian reported today.
Another media outlet, The Global Times, reportedly said Sun and his wife “accepted” 38.8 million yuan of illegal property from 2005 to 2014, and the pair could not explain holding another 9.7 million yuan in property holdings. As part of his official punishment, Sun's assets including his large property portfolio and money from bribes would be seized, according to Chinese state media.
Chinalco, of course, is connected to Simandou in Guinea, since the company up to the end of October was partnered with Anglo-Australian megaminer Rio Tinto (LON:RIO) to develop the world's largest mining project – through joint venture Chalco. But in July Rio Tinto said it had decided to put its Simandou project on ice due to the iron ore glut that is keeping a lid on prices – despite delivering a bankable feasibility on the project in May. Then on Oct. 28 Rio sold its 46.6% stake in Simandou to Chinalco, potentially opening up a new path to development for the $20 billion iron ore mine. The deal, worth between $1.1 billion and $1.3 billion, ups Chinalco's stake to nearly 95%.
The Australian reports that Sun and Sam Walsh, Rio Tinto's former chief executive, worked closely together, including a 2014 memorandum of understanding between Chinalco and Rio Tinto to develop the third and fourth phases of Simandou.