BAT fights claims of spying, bribery
Company commissions law firm to ‘thoroughly’ probe allegations
BRITISH American Tobacco (BAT) has moved to tackle allegations that it was involved in spying on competitors and bribing tax and law enforcement officials, commissioning an independent probe and ceasing all its activities in SA to combat the illicit tobacco trade pending the outcome of the investigation.
BAT SA’s new CE, Soraya Zoueihid, has also terminated, as a precaution, the services of the private investigations agency, Forensic Security Services (FSS), which BAT had retained to assist law enforcement agencies to tackle illicit tobacco, but is alleged to have engaged in spying and corrupting law enforcement officials.
FSS was dismissed two weeks ago after allegations of unlawful behaviour were posted on a Twitter account that links to about 12,000 online documents purporting to support allegations of unlawful conduct by BAT SA.
Zoueihid said in an interview with Business Day on Friday that she had notified the relevant South African authorities of the steps BAT had taken, due to the seriousness of the allegations.
“We would not in any way, shape or form tolerate such behaviour. We wanted to give a clear sign that we take this very seriously and to assure our suppliers, customers and government of this,” she said.
It is understood Lebanonborn Zoueihid, a long-time BAT executive who was previously in charge of the group’s French operation, was brought into SA to clean up the operation. She has been working with the group’s global legal advisers and has in the past couple of weeks appointed law firm Norton, Rose Fulbright in SA to conduct a “thorough and comprehensive investigation” into the allegations, which is likely to take six months or more.
BAT, which has by far the largest share of SA’s tobacco market, has been losing sales rapidly in recent years to local manufacturers of cheap cigarettes, who may or may not be paying excise duties and value-added tax on those cigarettes. (Spaza shops sell packs for as little as R7, whereas the tax on a pack should be R15.10.)
The illicit trade is estimated to cost SA R4bn-R5bn a year in lost revenue for the state.
A former FSS employee, apartheid-era intelligence operative Stephen Botha, in August made a series of allegations against BAT SA in an affidavit posted online along with 12,000 documents that purport to prove that BAT, assisted by FSS, unlawfully spied on local competitors as part of its efforts to fight the illegal cigarette trade in SA.
A new book, Rogue: the Inside Story of SARS Elite Crime Busting Unit, describes how BAT funded FSS to campaign aggressively against tobacco traffickers, including a seat on the Illicit Tobacco Task Team that included representatives from BAT, the Hawks, crime intelligence, State Security Agency (SSA) and the National Prosecuting Authority — but not the South African Revenue Service (SARS).
The book, by Johan van Loggerenberg, who was head of SARS’ “rogue unit”, and former SARS spokesman Adrian Lackay, says “The evidence may prove embarrassing for the cigarette giant, which appears to be running a private intelligence network enjoying active support from the SSA and other law enforcement entities.”
We would not in any way, shape or form tolerate such behaviour