China Broadens Steel-Industry Corruption Probe: NYT

Chinese authorities have detained or questioned at least seven people in a corruption investigation related to the detentions of four Rio Tinto (RTP: 128.5801, 0, 0%) employees, the New York Times reported Monday, citing Chinese state-controlled news media as the source.

The investigation began with accusations that the four Rio Tinto workers had conspired to steal state secrets, and broadened to include allegations of bribery and that the Rio Tinto workers had paid for "government trade and manufacturing data," according to the Times.

The Times cited state-controlled news media as saying senior managers at five steel factories were providing information to the government, including "shippers, traders and steel-mill managers." The paper also said that an executive at Shougang Steel, one of the country's biggest steelmakers, was detained last week.

Analysts and industry officials told the Times that many people in the steel industry are concerned that a wave of arrests and/or detentions could be coming in the next few weeks.

The Times said that industry experts said corrupt practices have occurred for many years.

A Rio Tinto spokesman didn't immediately respond to an email sent after normal business hours Monday. However, the company had issued a statement on Saturday quoting its iron-ore CEO, Sam Walsh, as saying "Rio Tinto continues to work to support its four China employees and their families and colleagues."

"Mr. Walsh said the company remained surprised and concerned over the detention of its employees, and said the company had not been told by Chinese authorities of any charges against them," the statement said.