Tobacco giant reluctant to claim $20m

PUBLISHED : Sunday, 10 November, 2002, 12:00am
UPDATED : Sunday, 10 November, 2002, 12:00am

One of the world's biggest tobacco companies has not made any attempt to claim back more than $20 million it is owed by a corrupt former SAR executive - four years after Hong Kong's most controversial cigarette-smuggling trial.

Law enforcers have expressed surprise that British American Tobacco (BAT) has not yet made a bid to retrieve the cash.

But bosses of the 100-year-old cigarette conglomerate said they were waiting for the Hong Kong government to receive compensation for its costs in the case before BAT dipped into the pot.

Former British American Tobacco (HK) export director Jerry Lui Kin-hong was jailed for plotting to receive bribes from cigarette smugglers in June 1998.

Mr Justice Wally Yeung Chun-kuen ordered Mr Lui - who is now out of jail and understood to be living in Hong Kong - to pay his former employers $23.25 million, later reduced to $21.25 million, in restitution.

Mr Justice Yeung also awarded $10 million in costs to the prosecution.

Mr Lui - against whom the Secretary for Justice filed a bankruptcy petition in June last year - was convicted in connection with a massive tobacco smuggling racket. In a separate prosecution relating to the same case, several triad members were convicted of plotting to kill key Independent Commission Against Corruption witness Tommy Chui To-yan in Singapore in 1995, just days before he was due to give evidence in Hong Kong.

Delivering his verdict in the Lui case, Mr Justice Yeung railed against big tobacco firms for putting profits before social responsibility.

'A leading international tobacco company sold large quantities of duty-not-paid cigarettes worth billions and billions of dollars, with the knowledge that those cigarettes would be smuggled into China and other parts of the world,' he said.

'In my view, the tobacco companies were clearly putting their commercial interests above whatever moral duty they may have towards our society, and to some extent such irresponsible behaviour amounted to assisting criminals in transnational crime.'

The only way BAT can claim its money back is by filing a civil suit against Mr Lui, which it has not done. Doris Ho, British American Tobacco (HK) corporate and regulatory affairs manager, said the company would eventually seek the $21.25 million and it would donate it to charity if the money was paid back.

'The money was bribes, so we don't want to be seen to be profiting from it,' she said.

A law enforcement source close to the original inquiry said: 'BAT is a business. You have to ask yourself why have they not made any attempt to get the money?

'Would they spend money on a suit to get the restitution from Jerry Lui, then give it all away?'

In October 2000, the British secretary of state for trade and industry announced a confidential investigation under the Companies Act into allegations of BAT's involvement in smuggling.

BAT's Web site says the company will co-operate fully with investigators.

Ms Ho said: 'BAT does not smuggle cigarettes, neither does it condone cigarette smuggling. We work closely with Customs to tackle smuggling because it hurts our company.'