[Intl-tobacco] BAT promotes executive in smuggling row

[Robert Weissman]

BAT promotes executive in smuggling row
by Kevin Maguire
Source: The Guardian, 2001-12-31

British American Tobacco faced
criticism last night over the promotion of an executive named in
damning documents detailing how the London-based company
systematically exploited cigarette smuggling.

Paul Adams - repeatedly mentioned in internal memos and notes handed
by campaigners to Department of Trade and Industry investigators -
has been made the new managing director of the world's second
biggest tobacco corporation.

The appointment, approved by the full BAT board, including former
Tory chancellor and health secretary Ken Clarke, has raised fresh
questions about the company's behaviour in the global cigarette
market.

Mr Adams, a former Europe director, was a top marketing figure in
Asia during the eight years from 1991 during which controversial
tactics were used to boost sales, including dubious deals with
smugglers.

BAT denies any involvement in smuggling, yet company files held by
Mr Adams in the early 1990s reveal that illegal trade conducted
under a series of euphemisms, including 'transit', was a core part
of the firm's business.

In one marked "secret - no file copy", but kept by Mr Adams, a
distributor reports on how a Singapore tobacco advertising ban was
circumvented while another said "unofficial channels" were the best
way to beat restrictions in China.

The Labour MP John Austin, a prominent member of the Commons health
select committee that called for the DTI inquiry, challenged the
promotion of Mr Adams.

"We can raise serious question marks against this particular
gentleman and I think it [his promotion] is something that the DTI
should take into consideration as part of its investigation," said
Mr Austin.

"It is difficult to know who has clean hands in the tobacco
industry. Anybody who has been associated with these companies for a
period of time is probably suspect on the health agenda and the
illegal trade agenda."

Investigators turned up unannounced at BAT's central London
headquarters in October last year to question senior executives and
seize documents, after the then industry secretary, Stephen Byers,
ordered an inquiry under section 447 of the Companies Act.

Mr Adams is to succeed Ulrich Herter, also mentioned in contentious
documents, who is to retire aged 59. Another senior executive,
finance director, Keith Dunt, heavily implicated by internal notes
in controversial trade in Latin America, announced earlier this year
that he was leaving the company at the age of 54.

BAT described Mr Adams as the "right man for the job" and said the
smuggling allegations were "just not an issue" when the company's
board appointed him managing director.

"We have said until we are blue in the face that we do not smuggle,"
the company said.

But Clive Bates, the director of the anti-tobacco group Ash, said:
"Paul Adams's fingerprints are all over the smuggling documents now
under investigation by the DTI, and it's amazing that the BAT board
could choose him to run the company apparently without asking
searching questions about his activities in the far east.

"If BAT wants to convince the public and the city that it is pulling
out of large-scale smuggling, they'll need to find an outsider to
run the company, because the internal candidates are in too deep or
implicated in the cover-up."