Tobacco company smuggling in Hong Kong

[Robert Weissman <rob@essential.org>]

Hire lawyers, judge warns tobacco firms  
South China Morning Post
16 June 1998, page 3
By Cliff Buddle

A judge has told two major tobacco companies to hire lawyers
after he suggested they may have known billions of dollars
worth of cigarettes were destined for smuggling.     

Mr Justice Wally Yeung Chun-kuen said he wanted to hear from
lawyers representing British-American Tobacco (HK) Ltd (BAT)
and its sister company, Brown and Williamson Tobacco
Corporation.   

The judge has to decide whether he should seize bribes of
$23.25 million from corrupt ex-tobacco boss Jerry Lui
Kin-hong, 42, to give to the two companies which employed him. 

He said evidence given during Lui's trial had caused him
concern.

 "The evidence seems to suggest that at all material times BAT
was in fact aware that this large quantity of cigarettes,
worth billions and billions of dollars, would ultimately end
up, through smuggling, in the China market," Mr Justice Yeung
said.

"Surely the court is entitled to take into consideration the
attitude of the company as far as this cigarette business is
concerned."

Prosecutor John Reading said: "The evidence indicated that not
only were Brown and Williamson or BAT aware that smuggling was
going on but as a consequence of that smuggling large
companies derived a huge amount of return from the sale."

The sentencing of Lui, who received five payments while with
Brown and Williamson and two while with BAT (HK), was
postponed to June 25 to give them the chance to brief lawyers.

Lui was convicted at the Court of First Instance on Thursday
of plotting to receive $23.25 million and a $10 million loan
between 1988 and 1993.

Evidence given during the trial dealt with the alleged
relationship between tobacco companies and smugglers.

The court heard Lui received the payments from cigarette
distributors Giant Island Ltd in return for ensuring them a
huge supply of BAT cigarettes.

Mr Reading said that according to the law the court could only
order that the bribe money be paid to Lui's employers.