BAT share price shrugs off new claims of bribery, corruption

THE NATIONAL Council Against Smoking (NCAS) yesterday called for British American Tobacco South Africa to be investigated by the Hawks.

This followed a BBC Panorama investigation this week that levelled new allegations against the group including bribery, smuggling and other questionable business practices.

British American Tobacco’s (BAT) share price closed 0.37 percent up at R536.59.

Over the three days since the investigation was made public, the share price has appreciated steadily each day, by 4 percent in total.

BAT said in a statement that it “emphatically rejects the mischaracterisation of its anti-illicit trade activity by the BBC and the Bureau of Investigative Journalism.”

BAT denied the allegations, said they were not new and had been covered extensively in the media over several years, and that the group was committed to the “highest standards of corporate conduct and transparency.”

“BAT has long been committed to fighting the global criminal trade in illicit tobacco.

“As part of those efforts, BAT has sought to assist national law enforcement agencies in providing support and, in the past, intelligence on suspected illicit operators,” it said in the statement.

The BBC claimed that BAT funded a network of almost 200 secret informants in southern Africa, with most of this work outsourced to a South African private security company called Forensic Security Services (FSS).

FSS was tasked to fight the blackmarket

cigarette trade, but former employees had claimed they broke the law to sabotage BAT’s rivals. FSS worked for BAT in southern Africa between 2000 and 2016.

The report suggested that customs officials and police officers were bribed, while the phones of BAT's competitors were tapped and tracking devices placed on competitor delivery vehicles. It also suggested that staff were bribed

to hand over information.

It is not the first time BAT has been accused of bribery. In 2015, BBC Panorama claimed BAT had secretly paid politicians and public servants, but a subsequent five-year investigation by the UK’s Serious Fraud Office concluded in January that there was not enough evidence for prosecution on these claims.

“It is not surprising BAT is once

again entangled in such accusations,” said Dr Sharon Nyatsanza, project and communications manager at NCAS.

“Decades of tobacco industry interference tactics with policy are well-documented,” she said.

According to the reports, BAT used potentially questionable payments to try to influence tobacco control policies and undermine competitors, she said.