Tobacco Industry – When Thieves fall out?

September 6, 2014 — Leave a comment

Tobacco-Wars-350x207The Business Times article “BAT hauled to court over spy claims” published Sunday, 31 August reveals, if nothing else, a web of spying and skulduggery within the tobacco industry. Guaranteed we haven’t heard the last of this saga yet……read on:

British American Tobacco (BAT) could have its dirty linen aired in court following a sensational high court application launched by local “value brand” producer Carnilinx for alleged “corporate espionage”.

In the application, Carnilinx director Kyle Phillips claimed BAT paid Pretoria attorney Belinda Walter for commercially sensitive information she obtained while “infiltrating ” the company and the FairTrade Independent Tobacco Association (Fita) in 2012 and 2013. If this goes to trial, these spy claims could be extremely damaging for BAT, which is based in London and is the largest company listed on the JSE Securities Exchange, worth R1.26-trillion.

“BAT has used unlawful means to interfere in the business of the applicant. It has paid [Walter] monies to spy [on Carnilinx],” Mr Phillips claimed.

Ms Walter acted as the attorney to Carnilinx and as chairwoman of Fita, an industry body ostensibly established to represent South Africa’s smaller tobacco manufacturers.

Carnilinx is headed by Adriano Mazzotti, who donated cash to the Economic Freedom Fighters, which helped it to contest the May election.

Mr Mazzotti’s company is asking the court to interdict Ms Walter from providing any further information to BAT and to stop BAT unlawfully “interfering with its trade”.

Carnilinx’s application is based on Ms Walter’s “confession” during a meeting in February, in which she detailed her role as an informant for the government’s State Security Agency, which allegedly introduced her to Forensic Security Services (FSS).

This private security firm works for the Tobacco Institute of SA (Tisa), which represents the larger tobacco producers, notably BAT.

This journalist witnessed Ms Walter’s admissions at that meeting. In its legal papers, Carnilinx said FSS then “introduced Walter to BAT, to whom she would give information on the smaller manufacturers”.

Mr Phillips goes further, saying Ms Walter proposed creating Fita in the first place so “she could infiltrate all the smaller tobacco manufacturers”.

“The first Fita meeting was held late in 2012, at Walter’s offices, which Walter admits with her compliance and knowledge was bugged by FSS.

For the information she fed to BAT, Walter was paid,” he said. In Ms Walter’s opposing affidavit, filed on Friday, she claimed she was under “extreme emotional distress” during that meeting with Carnilinx in February, because of physical threats against her and her son.

She denied “any commercial or attorney-client relationship with BAT South Africa”, and said she was “nothing but a thorn in their side”.

When asked by the Sunday Times this week, Ms Walter did not deny that she fed information to BAT’s London office, or that she had knowingly allowed the first Fita meeting to be recorded by FSS. But she said the leaking of information was common practice among Fita members.

Instead, in her court papers, she mounted a scathing attack on her former client, Carnilinx.

“Carnilinx also attempts to paint a picture that they are ‘victims’, choir boys in the church choir. This is simply not the case,” she claimed.

Ms Walter said she could say “with confidence” that almost all Fita members provided information on each other to law-enforcement agencies about widespread “dealings in illicit products and criminal activities”.

She claimed Carnilinx employed “its own investigators to spy on competitors, rat out its competitors to law-enforcement agencies and provide substantial information on illicit trade of its competitors to the South African Revenue Service” (SARS), and that “at least one Carnilinx director is a paid SARS informant”.

Ms Walter resigned as attorney to Carnilinx, and soon after as chairwoman of Fita last November after becoming romantically involved with the head of SARS’s enforcement division, Johann van Loggerenberg.

That relationship ended “acrimoniously “, prompting Ms Walter to lay complaints with SARS against Van Loggerenberg, in which she claims he divulged confidential taxpayer information relating to his investigations into Carnilinx, among others.

Now Carnilinx is claiming Ms Walter “fed information on Carnilinx to SARS “. In response, Ms Walter alleged that Carnilinx was offered “tax leniency” in exchange for filing the application against her — an allegation Mr Mazzotti has denied.

Ms Walter has asked the court to order that if this case goes ahead, SARS and Mr Van Loggerenberg should be “forced to put pen to paper and make affidavits in response to my allegations of the corrupt conduct and collusion in this malicious and vexatious application”. Source: The Sunday Times (Business Times)

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