EXCLUSIVE: ‘British American Tobacco used state agency to spy on competitors’
Whistleblower exposes industrial espionage and tells how it became more sinister as politicians got involved
Top management of the South African and Zimbabwean branches of the world’s largest tobacco producer, British American Tobacco, is under investigation by UK and EU authorities for alleged industrial espionage, money-laundering and bribing government officials.
A whistleblower has described to Times Select how the criminal activities allegedly went down and involved politicians and state agencies.
Madlakazi Mphahlwa, spokesman for BAT SA, declined to respond to questions when approached for comment.
The investigation is part of a larger probe into BAT’s alleged spying operations in Africa.Times Select has learnt that the UK Serious Fraud Office (SFO) together with the EU anti-corruption unit (OLAF) began investigating BAT SA senior management in November last year.
The investigation into BAT SA staff comes from a larger probe by the SFO into BAT, launched in August 2017. That investigation was into how BAT conducted its business in East Africa.
The East African probe started after a whistleblower – former BAT employee Paul Hopkins – alerted UK authorities in 2015 to how the company was allegedly bribing government and revenue officials in Kenya, Burundi, Rwanda and Comoros for inside information on their competitors, including distribution routes, production and manufacturing strategies, and how the multibillion-dollar company was attempting to have tobacco control laws subverted in the countries they operated in for their benefit.
The new leg of the investigation has seen UK authorities, assisted by EU anti-graft investigators, contact multiple former South African law enforcement authorities for information to aid them in their investigation.
The information the foreign agencies are seeking relates to the operations of BAT in South Africa and Zimbabwe.
SFO spokesman Omer Hamid said the SFO was “investigating suspicions of corruption by BAT and subsidiaries”.
He cited “operational reasons”. to not comment further.Times Select has learnt that the SFO has been in contact with South Africans who have intimate knowledge on how BAT was allegedly using South African law enforcement authorities and state intelligence agents to run disruption operations against local cigarette manufacturers.
Those in communication with the SFO have provided detailed information on how bribes were paid, to whom, and how state agencies were subverted by the company to undermine local manufacturers.
According to information provided to Times Select, the SFO team includes specialised accountants who are looking at bank accounts which BAT Plc allegedly instructed be used to pay bribes for information, which included the bribing of South African government officials.
Sources speaking to Times Select on condition of strict anonymity confirmed they had been contacted “with the view to co-operate with the international investigation”.
The information being shared focuses on BAT Plc (the company’s international headquarters in London), BAT SA and BAT UK, as well as their former security service provider, Forensic Security Services (FSS) and how FSS was used to allegedly run the espionage operations.
The information which is being provided includes how senior BAT managers allegedly condoned money laundering operations in South African and Zimbabwe.
BAT SA terminated its contract with FSS in 2016 and employed the services of the Johannesburg law firm Norton Rose Fulbright (NRF) last year to conduct an internal investigation into the allegations after learning of the SFO probe.
Times Select understands that the report by NRF allegedly found criminal liability, although this has apparently still not been reported by BAT SA to the Hawks as required by the Prevention and Combating of Corrupt Activities Act.
FSS chief executive officer Stephen Botha confirmed that its contract with BAT SA, which was to curb the illicit trade in cigarettes, had been terminated in October 2016.
He said while he had not been approached by the SFO or OLAF, he had lodged a fraud case with the Hawks against several South African tobacco manufacturers and his own staff. He said he had been told the Hawks were still investigating.Former FSS member Francois van der Westhuizen, who has turned whistleblower, described in detail to Times Select the alleged industrial espionage activities he helped FSS run on behalf of BAT SA.
“BAT SA management had me trained in industrial espionage by ex-UK military intelligence agents. We were trained in vehicle tracking systems, counter surveillance and information peddling. We were tasked to spy on local cigarette manufacturers. I ran two projects for nearly four years. The main reason was to disrupt the operations of BATs competitors,” he alleged.
He claimed they were given unlimited resources and access to secret bank accounts to run the operations.
“BAT SA operated on the orders of BAT Plc. We did some serious shit. BAT has big money and we used police, intelligence agents, and had access to metro police departments CCTV cameras, which covered various cities, to spy and disrupt the opposition, by monitoring their distribution routes and vehicles,” he alleged.
“It was not just in one region we operated. We did this nationwide. We would use SARS and the police to raid BAT’s opposition factories, warehouses and places that sold their cigarettes.”
Van der Westhuizen, who left FSS after the involvement of the State Security Agency in their operations, said he and his family had survived several attacks after blowing the whistle.
“It became something more than just cigarettes and spying on BAT opposition. It became far more sinister, with spying on politicians’ families,” he claimed.He said while he had not been contacted by the SFO or OLAF, he would help if required.
Sinene Nguni, Fair Trade Independent Tobacco Association chief executive officer, which represents South African local tobacco manufacturers, said they had helped their members lay complaints against BAT SA and BAT Plc, but nothing had come of them.