BAT Faces More Bribery Claims in Africa

Source from:  Finacial Times 12/08/2015

British American Tobacco bribed a local official to misreport the impact from a fire at one of its warehouses in Uganda, a former company employee has alleged.

Solomon Muyita makes the claims in his case for unfair dismissal from BAT in 2013 where he was a corporate and regulatory affairs co-ordinator. He says the cigarette group bribed an official to secure a report stating there was no harmful impact from the fire. He also claims that BAT paid off victims in the east African country who allegedly suffered chemical poisoning in a separate incident.

The accusations come days after Paul Hopkins, who worked for BAT in Kenya for 13 years, alleged in a BBC Panorama programme that he had paid bribes on BAT's behalf to undermine antismoking legislation in five east African countries, and helped the London-listed company secure market share in the region.

Mr Hopkins has held two meetings with the Serious Fraud Office in the UK to discuss the case, but the agency has not yet said whether it will launch an investigation into BAT.

Mr Hopkins told the Financial Times he encouraged Mr Muyita to report the events under BAT's whistleblowing policy in 2013, but that no action was taken by the group.

Mr Muyita worked for BAT for three years as a corporate and regulatory affairs co-ordinator until he was fired in July 2013 for a number of alleged offences, including involvement in illegal activities and being unable to account for expenses.

"When you bribe someone, there are no receipts," Mr Hopkins told the FT when asked about Mr Muyita's case.

Mr Muyita claims that three months after a fire "gutted" a BAT warehouse in January 2011, he accompanied a BAT lawyer to pay USh10m ($4,000) to an unnamed National Environmental Management Authority official. He says the payment was "to secure a report from the environment authority indicating there was no environmental risk associated with the fire to the neighbours".

In a letter seen by the Financial Times, sent in late February to BAT five weeks after the fire, the agency said it had received "complaints from . . . residents . . . about the impacts being experienced and inconveniences that have been caused by the continued presence of the burnt tobacco waste in the area".

But in April 2011, after Mr Muyita alleges the payment was made, the agency wrote to BAT to say the issue had been resolved.

"We monitored the disposal process and your report does not significantly defer [sic] from ours. We appreciate that all the burnt tobacco was safely transported and disposed of . . . in accordance with our set guidelines and regulations," it said.

The following year BAT Uganda paid USh1.75m to cover "medical bills", "victims['] welfare" and "security operations" in relation to the alleged chemical poisoning, Mr Muyita said in his witness statement.

The money was an "illicit payment disguised as charity but intended to compromise the affected family and medical workers involved in their treatment and stop them from speaking to the media or government authorities about the incident which could potentially damage BAT's reputation", according to his account.

Appendices to Mr Muyita's statement include copies of receipts for payments that Mr Muyita alleges were in effect authorising bribes.

BAT said it could not comment on the Muyita case, which is still being heard by a court. It added, however, that payments made after the poisoning incident "were legitimate and evidence of this has been provided to court".

"With regard to the allegation of payment to a regulatory authority to change its response to a factory fire, no payment was made as alleged," it said.

Mr Muyita, whose case is being heard by Uganda's High Court, did not respond to requests to comment.

According to Euromonitor data, BAT has the largest share of cigarette sales in the Middle East and Africa. In an investor presentation earlier this year it flagged a number of African countries as offering "further opportunities" for sales growth.

Cigarette sales in Uganda were $87.4m in 2014 at constant currency rates, compared with $477.9m in Kenya, Euromonitor says. Enditem