Hong Kong Smuggling: Tobacco Chiefs `in the know' (fwd)

[Robert Weissman <rob@essential.org>]

Hong Kong Standard 16 June 1998 "Tobacco chiefs `in the know'" 

By Neil Western

TOBACCO bosses were invited by a High Court judge on Monday to answer
claims they sold cigarettes worth billions of dollars knowing they would
be smuggled to the mainland.

Justice Wally Yeung called on representatives of British American Tobacco
(HK) and BAT subsidiary Brown and Williamson to address him on the issue.

The judge has to decide whether Jerry Lui Kin-hong, who took $23 million
in cash bribes while an employee of both firms, should hand over his gains
to his former employers.

The law only allows restitution to be paid to Lui's employer, either BAT
(HK) or Brown and Williamson, but not the government.

Mr Justice Yeung said he had power to award either firm just $1 or the
full $23 million but wanted to assess the attitude of the companies first.

Lui, 42, was found guilty last week of conspiring with former directors of
Giant Island Ltd to accept advantages between August 1988 and May 1993. 

For 16 months of that time Lui was director of exports for BAT (HK) Ltd
and took the cash to ensure the supply of duty-not-paid cigarettes to
Giant Island.

Mr Justice Yeung said: ``The evidence as adduced by the prosecution seemed
to suggest that at all material times BAT was aware, and management of the
company was aware that large quantities of cigarettes worth billions of
dollars would ultimately end up in the mainland.

Inviting both firms to address him, the judge said: ``I do not wish to be
seen to condemn a party without giving it the chance to be heard first.''

Prosecutor John Reading said: ``The evidence indicates that not only were
B&W and BAT aware that smuggling was going on but as a consequence of
smuggling large companies have derived a huge return from the sales.''

He said a decision on restitution should not involve the cigarette
companies at all.

Costs running into millions of dollars incurred in extraditing Lui from
the US and putting him on trial are also being sought by the Department of
Justice.

Mr Justice Yeung said there were competing interests between that and the
possible restitution order. 

``It may well be if Lui pays one sum he cannot pay the other. The
prosecution is in conflict with BAT and B&W,'' the judge said.

Prosecutors valued Lui's assets at $23.5 million in 1996, but that
included $9 million for a flat in Redhill and other property which may
have gone down in value amid the slump.

The tobacco firms will be invited to address the court on 25 June.