A former British American Tobacco (BAT) Kenya executive is entangled in fresh claims of bribery and corporate espionage allegedly carried out across southern Africa by the UK cigarette manufacturer.
The Fair Trade Independent Tobacco Association (FITA), a lobby representing small tobacco firms, has petitioned The Hawks – the police wing which investigates serious crimes such as organised crime and bribery – to investigate BAT claiming it ran a campaign to discredit competitors in South Africa and neighbouring markets.
Gary Fagan, who served as BAT Kenya managing director between 2008 and 2013, is now in charge of southern Africa markets including Swaziland, Botswana, Namibia and Mozambique.
An affidavit sworn by an unnamed former spy who worked for Forensic Security Services (FSS), a South African private military firm, details how BAT hired a network of spies across the region and bribed public officials to harass rival firms such as Carnilinx.
“Effectively, my mandate from BAT South Africa was to ensure a disturbance to the business of each of Carnilinx’s distributors to the point that it becomes more of a trouble to stock Carnilinx’s products,” reads part of the affidavit.
“Law enforcement agents are to be paid up to ZAR5,000 (Sh32,700) a month for cooperating with FSS and BAT South Africa in disturbing Carnilinx trading operations,” says the ex-detective turned whistleblower.
For the second time in as many months, BAT plc is facing allegations of bribing top tax officials, legislators and rival company insiders in Africa as part of a scheme to undermine competition and stifle anti-smoking laws.
BAT plc allegedly bribed Kenya Revenue Authority (KRA) officers to hand over tax files belonging to rival Mastermind Tobacco, pushed for the company to be slapped with numerous tax demand notices, and bought sensitive materials such as board meeting minutes, according to an expose by BBC’s Panorama aired in November 2015.
BAT plc said it has hired a consultant to investigate the bribery allegations across southern Africa. The London-based firm said it was yet hear from South African authorities regarding the allegations made by FITA.
“Recently various new allegations have been made and, in light of the number and nature of the allegations of which we are now aware, a full investigation is being conducted with the assistance of an external law firm,” said a BAT plc spokesperson.
“If we were to find that illegal activity had occurred, we would, of course, take appropriate action,” said BAT plc in a statement to the Business Daily.
FITA’s dossier on claims of irregular activities by BAT includes a list of more than 70 spies, receipts of payments to spies, and pre-paid cards used to wire payments to public officials in South Africa and neighbouring markets.
“Private investigators operating an illegal covert network of rogue spies throughout South Africa who in turn are paid to spy on us,” the lobby said in a statement.
Whistleblower Paul Hopkins, who worked for BAT Kenya for 13 years, was the man who was tasked to deliver bribes to officials in East and Central Africa.
“We paid the KRA guy, the right KRA guy a shed load of money. He issued all the tax demands. I mean we have tax demands now,” says Mr Hopkins in a leaked recorded telephone conversation with then BAT Kenya boss Gary Fagan.
In the phone chat, Mr Fagan does not object to these elaborate bribery plans and assures Mr Hopkins, an ex-Irish soldier, that his position in the company is guaranteed “as long as you want one.”