The bribery claims levelled against UK’s British American Tobacco (BAT) Tuesday spread its tentacles across corporate Kenya sucking in rival Mastermind Tobacco and forcing out an East African Breweries Limited (EABL) executive.
The British Broadcasting Corporation’s (BBC) Panorama expose found that BAT paid government officials to, among other ends, stifle competitors – a claim that appears to lend credence to Mastermind’s long-running stance that the UK firm has been using underhand tactics to entrench its dominance of Kenya’s tobacco market.
EABL was drawn into affair after it emerged that a corporate affairs executive it hired from BAT Kenya, Julie Adell-Owino, organised payment of bribes to senior Kenya officials, including Bungoma senator Moses Wetang’ula, for reasons that were not explained. Ms Adell-Owino worked at BAT Kenya as the company’s chief lobbyist.
Ms Adell-Owino on Tuesday resigned from EABL, signalling that the brewer did not want to be associated with the corporate upheaval at BAT.
“After discussions with my family we felt that it was best that I prioritise clearing my name and upholding my integrity which is critical to any role I would have as a senior executive,” Ms Adell-Owino told the Business Daily on the phone.
Paul Hopkins, who worked at BAT Kenya for 13 years, told the BBC investigative team that he and others, including Ms Adell-Owino, were tasked with the role of ensuring that “the competition never got a breathing space.”
Mastermind said it was studying the developments and would issue a comprehensive response once it was in possession of more information.
Mr Hopkins, who leaked hundreds of secret documents including emails to the BBC’s investigative team, is expected to meet investigators from the UK’s Serious Fraud Office (SFO) this week.
BAT Kenya’s parent — which holds a 60 per cent stake in the Nairobi Securities Exchange-listed firm — could pay hefty fines if found guilty of bribery offences.
The scandal highlights the ruthless tactics employed by multinationals in Kenya and other African countries to win business and defeat regulations in concert with corrupt local officials.
American tyre company Goodyear and UK’s Oxford University Press are among the multinationals that were recently fined hundreds of millions of shillings in their home countries for bribing officials in Kenya and other African countries.
Mr Hopkins said he started paying bribes after he was told it was the cost of doing business in Africa, revealing the entrenched practice in BAT’s African operations.
The leaked documents show Ms Adell-Owino in a July 2012 email requested the purchase of a business class plane ticket to London for Mr Wetang’ula who was then the Minister of Trade.
“Mr Wetang’ula will be “hosted at Globe House, BAT’s London headquarters,” the email says, adding that the transaction should be “paperless” and there should be “no receipts if any in his name”.
When Panorama asked Mr Wetang’ula about the email, he said he was “shocked” and “upset” and would take legal action against anybody circulating “such a crude rumour” against him.
“I did not receive any ticket or any money… I never had dealings with BAT,” the senator said.
But in documents submitted to a UK employment tribunal, BAT described the purchase of the plane ticket as a one of a series of “unlawful bribes”.
The documents state that BAT Kenya’s former CEO Gary Fagan stopped Ms Adell-Owino’s promotion at the company after becoming aware of the payments and that she quit her position shortly afterwards.
Besides the payments to Mr Wetang’ula, Ms Adell-Owino, who previously served as a senior official at the Kenya Anti-Corruption Commission, arranged bribes amounting to $26,000 (Sh2.6 million) for three public officials in Rwanda, Burundi and the Comoros Islands.
All three officials were connected to a United Nations effort to reduce the number of tobacco-related deaths, the WHO Framework Convention on Tobacco Control (WHO FCTC).
The convention, to which Kenya is a signatory, seeks to reduce use of tobacco by addressing both the demand and supply side in ways that BAT and other tobacco firms have been fighting.
The measures include higher taxes on cigarettes, banning of smoking in public, public education and restrictions on tobacco advertising and sponsorship. Others are the curbing of illicit trade in tobacco and sales to minors.
The government has proposed to further tighten anti-smoking laws and policies in Kenya, causing tobacco firms led by BAT to put up a fight through lobbying and the courts.
BAT in July successfully petitioned the High Court to suspend the implementation of new tobacco regulations that would have forced cigarette manufacturers to display graphic images on packets to serve as a health warning to smokers.