Asian backlash expected

MACARTHUR Coal’s dealings with Asian companies could come under pressure following corruption charges against mining magnate Ken Talbot.

Academics said some Asian companies might be concerned about the perception of corruption, particularly if it reflected on themselves.

But one industry consultant with coal marketing experience did not think it would affect customer negotiations, saying some might even be bemused by the charges.

Mr Talbot, Macarthur’s major shareholder, was told on Friday he faced 35 charges relating to secret commissions over $300,000 in loans made to former state government minister Gordon Nuttall.

Both Mr Talbot, a well-regarded businessman, and Mr Nuttall have denied any wrongdoing.

Mr Talbot has stepped aside as chief executive officer, while Macarthur has argued it has a deep management chain and business is proceeding as normal.

It sold 4.9 million tonnes of coal last year with key markets including Japan and Korea.

Tessa Morris-Suzuki, a Japanese history professor at the Australian National University, said the charges “would be likely to be a concern”. “There have been a lot of stories in the media about (business-linked) corruption within Japan,” she said.

Companies there were wary of being caught in negative media commentary, she said. “They’d probably be quite cautious about dealing with a company that was publicly engaged in issues . . . reported in the media.”

An industry consultant, who declined to be named, did not think the charges would make a big difference, especially as Mr Talbot had not been convicted.

“A lot of people, particularly (in) Japan and Korea, would probably look at something like that bemusingly and say ‘Doesn’t everyone do that’ (lend money to a friend)?”, he said.

But a conviction might raise new doubts about dealings, he said. Macarthur is 12 per cent owned by a subsidiary of one of China’s largest state-owned enterprises.

University of Queensland associate professor Chi-Kong Lai said any question of corruption would hurt a businessperson’s reputation, especially with Chinese customers.

“China is trying to build a so-called clean government ideology, so there are a lot of anti-corruption movements in place,” he said. “His reputation would have some impact but coal is strategically important to China. Business in China is growing so it depends on how they value the company.”

One Brisbane business executive, who stressed the full story was unknown, said Macarthur might have to “look at its own culture”.

Source: www.news.com.au