British regulators confirmed Tuesday they are investigating allegations of bribery and corruption practices by British American Tobacco Plc.
The Serious Fraud Office said it is looking into “suspicions of corruption in the conduct of business by BAT, its subsidiaries and associated persons.”
BAT is the world’s largest publicly traded tobacco manufacturer, having completed July 25 its $54.5 billion purchase of the 57.8 percent of Reynolds it did not already own. Reynolds has become BAT’s largest global subsidiary, with legacy Reynolds shareholders owning 19 percent of BAT.
A 2015 BBC documentary disclosed claims of bribery committed by former BAT employees and individuals working on BAT’s behalf in Kenya, South Africa and Uganda.
The bribes allegedly were made to politicians and policymakers to cover up environmental damage and corporate espionage linked to BAT.
BAT has denied the claims, but said in its 2015 annual report that “a number of allegations were made regarding historic misconduct in Africa.”
BAT said Thursday in its fiscal 2017 half-year report that “the investigation into allegations of misconduct, which is being conducted by external legal advisers, is continuing. As part of this, we continue to liaise with the Serious Fraud Office and other relevant authorities.”
On Tuesday, BAT said it “has been informed that the Serious Fraud Office has now opened a formal investigation. BAT intends to cooperate with that investigation.”
Stephen Pope, managing principal with industry research firm Spotlight Ideas of London, said “there is an element of truth in that the wheels of government and legislation in Africa turn more easily if ‘greased.’ “
“However, it is certainly not a practice that should be applauded.”
The Campaign for Tobacco-Free Kids called unsuccessfully on U.S. regulators to halt the BAT purchase of Reynolds until the British investigation into the fraud allegations had been completed.
“The allegations that British American Tobacco paid illegal bribes to influence members of parliament and gain advantage over competitors in multiple African countries are truly shocking,” Matthew Myers, president of the anti-tobacco advocacy group, said in a statement Tuesday.
“British American Tobacco should be investigated and prosecuted to the fullest extent of the law.”
Myers said the group “urges” the U.S. Justice Department “to also investigate the company’s alleged misconduct”as part of its full ownership of Reynolds.
Myers used the investigation as another public advocacy moment, saying the allegations are “a reminder to the public that tobacco companies cannot be trusted.”
Winston-Salem Journal | Tuesday, 1 August, 2017