Press release – FITA – for immediate release
The local South African tobacco manufacturers that make up the membership FITA, and who
comprise of all the major local manufacturers have been having a devil of a time in exposing
the misdeeds of multi-national tobacco manufacturers. For reasons unknown to FITA, neither
the media, nor our law enforcement agencies seem to have any appetite to pursue and
expose credible cases of corruption, fraud, money-laundering, racketeering which implicate
primarily British American Tobacco (BAT).
In recent times, the overlap between private companies and state officials in corruption and
state capture has become increasingly apparent. Some examples would be the scandals and
controversies surrounding multi-nationals such as McKinsey, Bell Pottinger, SAP, KPMG,
Trillian, Lonmin, Naspers, MultiChoice and Steinhoff to name a few. What is notable of these
examples is how virtually every single one of them almost immediately acted by conducting
“internal investigations” with speed and ultimately confessing to one extent or another to the
public. In some cases, key employees were also reported to law enforcement agencies in
South Africa and abroad. This stands in absolute contrast to the BATSA and BAT Plc “internal
investigations” which have been dragging on for years, with absolutely no transparency or
communication to the public. One must therefore question the legitimacy and independence
of these “investigations”, and the genuine desire of both BATSA and BAT Plc to deal with
allegations implicating them and entities and persons associated with them, within this

1. BAT Plc appointed Linklaters in 2015 to do an “internal investigation”. Nothing came
of it. By 2016 they appointed Slaughter & May to do same. To date no results have
been made public.
2. BATSA appointed Norton Rose Fulbright in 2016 to do an “internal investigation”.
Same story, and now we are in 2018 already.

Since 2015, there has been ample evidence in the public domain which points to industrial
spying, unfair practices, corruption, tax evasion, money-laundering, racketeering, aggressive
tax base erosion practices and market abuse by BATSA and BAT Plc. These not only point to
such activities in South Africa, but include countries such as Zimbabwe Zambia, Kenya, Russia,
Bangladesh and elsewhere in the world. In the South African example, both BATSA and BAT
Plc and their agents have been directly implicated in the capture of officials at the Hawks,
State Security Agency, South African Police Service, Crime Intelligence and National
Prosecuting Authority to do their bidding and place undue pressure on local small
manufacturers. They further instructed their appointed agents to spy on public officials
including high profile politicians. The evidence in support hereof is overwhelming. Despite
this, we have seen no markable action by our law enforcement agencies to act against BATSA,
BAT Plc and their agents or any of those officials in any manner. This raises the question as to
whether more such officials have been captured and if so to what extent? Who is protecting
BATSA and BAT Plc and why?

We know as a fact that SARS and BATSA were locked in a tax dispute amounting to close to R
1 billion as far back as April 2014. BATSA announced this in their prospectus published in that
month. However, since the commotions that followed at SARS during 2014 and 2015, it seems
this matter dropped from the radar. We also know as a fact that since 2013, SARS under their
so-called Project Honey Badger, were investigating allegations of tax evasion, money
laundering, racketeering and corruption which implicated BATSA, BAT Plc, some of their
employees, consultants and service providers. Again, after the drama at SARS in 2014 and
2015, these cases seem to have just disappeared. We are also aware of a much older case,
dating to the early 2000′s, which was uncovered by SARS in Project Honey Badger, and which
allegedly implicated BATSA in the fraudulent clearance of a stolen container of cigarettes,
which was destined for Mozambique and never arrived there. Once again, seemingly
following the disruptions at SARS in 2014 and 2015, this matter has also gone cold.

Now that KPMG has withdrawn its SARS report and paid back R23 million – we also ask why
their investigation did not unearth the BAT nonsense. Why do they list FITA members
Amalgamated Tobacco Manufacturers and Carnilinx in their report, but not BAT. Instead they
only briefly mention a “global tobacco manufacturer”. What are they covering up?

Issued by the Fair-trade Independent Tobacco Association: 15 March 2018
For queries kindly contact Monique Vogel t: 011 044 5355; e:

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