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Graft probe turns to five Chinese steel groups

After the arrest of four Rio Tinto executives on spying charges, a Chinese steel-industry investigation has turned to five major Chinese groups whose executives are accused of accepting bribes in return for revealing confidential information.

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AFP - China is investigating five major domestic steel firms in connection with charges that executives of Anglo-Australian mining giant Rio Tinto stole state secrets, state media reported Tuesday.

Officials from the China Iron and Steel Association, which represents Chinese mills in talks with Rio Tinto and other global giants, are also being investigated, the China Daily reported.

It did not specify which agency was investigating the Chinese firms.

However the Shanghai branch of the national security ministry, which handles espionage cases, is holding the four Rio Tinto executives, including an Australian, in a case straining ties with Canberra.

Rio Tinto and other major iron ore suppliers are accused of bribing executives to get access to data such as stock levels, production volumes and schedules and financial information, the newspaper said.

The Chinese companies implicated include China's largest steel maker Baosteel Group Corp, Ansteel, Laigang Group and Jigang Group, the newspaper reported.

Officials at Ansteel and Laigang told AFP on Tuesday they were unaware of the reported investigation.

Baosteel and the China Iron and Steel Association declined to comment and Jigang officials were not immediately available.

At China's eighth largest steel mill, Shougang, Tan Yixin, the head of iron ore imports, was arrested last week for alleged commercial crimes, state media reported.

Initial state media reports said he was arrested by Beijing police.

Tan was said to have been close to Australian national Stern Hu, Rio Tinto's Shanghai general manager, who is being held by Chinese authorities.

China's foreign ministry last week said it had proof Hu and his three Chinese Rio Tinto colleagues stole state secrets, endangered national security and caused China economic losses.

Talks between Chinese mills and Rio, the world's third-largest miner, to set iron ore prices for the coming year, missed a key deadline on June 30.

Rio Tinto has said it was not aware of any evidence against its four employees whose arrests have cast a shadow over one of Australia's most important trade and diplomatic relationships.

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