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BAT Zimbabwe was recently on the radar of Zimbabwean authorities on allegations of economic espionage

A tax probe by South Africa Revenue Services into the tobacco industry has exposed rampant illegal and unethical practices, including corporate espionage with British American Tobacco South Africa at the centre of the storm.
BAT Zimbabwe was recently on the radar of Zimbabwean authorities on allegations of economic espionage. BAT Zimbabwe and BAT SA are associates of BAT Plc.
Allegations against BAT Zimbabwe arose after Savanna Tobacco, Kingdom, Breco trading as Fodya Private Ltd, Trednet, Catrag and Chelsea allegedly lost cigarettes worth R100 million to organised hijacks, a charge which the company “strongly” denied.

It was said BAT Zimbabwe does not export, and as such, its products are not exposed to the risk of alleged hijackings of cigarette trucks while in transit to neighbouring countries. President Mugabe also expressed concern over allegations that BAT was involved in unethical practices to sabotage local cigarette exporters.

Now, a letter from SARS to all South Africa’s tobacco companies on March 6 and seen by Business Times revealed that a tax probe also unearthed rampant illegal and unethical practices.

While SARS does not name specific companies, SA industry insiders said the letter referred to poor behaviour across the board — from large operators such as BAT to smaller “value-brand” firms under the banner of the Fair-Trade Independent Tobacco Association.

The letter, which suggests arrests and prosecutions could follow, was signed by SARS investigations head Johann van Loggenberg, and sent to Lieutenant-General Anwa Dramat, who heads the Hawks crime-fighting unit, according to Business Times.

The SARS letter appears to confirm allegations of corporate espionage and possible money-laundering by BAT.
The SARS letter also indicates that UK and US tax authorities were investigating BAT.

In March, the Business Times published excerpts of a conversation between a BAT South Africa official and someone hired to spy on rivals, in which the tobacco executive implored the “agent” not to “sell us out” by disclosing their dodgy cross-border dealings.

The BAT official said: “We will never reveal who we pay because of the nature of the business and the danger to the individuals . . .  I am not going to reveal that because it is a life-threatening issue.”

The SARS letter provided further confirmation, identifying people “who have been employed by a manufacturer in a secretive manner to collect confidential information on their competitors”.

“This has led to these individuals receiving remuneration, in some cases from offshore sources, in a way that can only be considered to be money-laundering.”
Tabby Tsengiwe, a BAT spokesperson, said the company took the allegations “very seriously”, and “regards compliance with all local laws as a priority and we do not engage in any illegal conduct”.

Last month, Savannah Tobacco — one of Zimbabwe’s leading tobacco firms — reportedly said industrial espionage was choking its potential and capacity to increase exports by at least 50 percent — Business Reporter/Business Times.