Suspect accused of taking more than $11m in bribes to help syndicates smuggle cigarettes worth $116m into the mainland
South China Morning Post, February 27, 2004, page A1 -BENJAMIN WONG
A senior executive of a state tobacco manufacturer owned by the Shanghai Industrial (Holdings) conglomerate has been arrested by the ICAC for allegedly helping several syndicates smuggle $116 million worth of cigarettes into the mainland.
The Independent Commission Against Corruption believes the executive was paid more than $11 million in bribes for giving the smugglers preferential treatment in supplying his company’s cigarettes.
An ICAC statement described the firm as a wholly owned subsidiary of a listed Hong Kong company. Sources confirmed it was the Nanyang Brothers Tobacco Company, producers of the famous Double Happiness brand.
A spokesman for Shanghai Industrial said last night the company had been notified about the case and was monitoring its developments. But he refused to confirm whether the company was involved in the case.
The ICAC alleges that with the executive’s help, the syndicates managed to buy 116 containers of cigarettes from the company. It alleges the executive knew the cigarettes would be smuggled into the mainland. The tobacco manufacturer had offered to help investigators, the ICAC said.
The ICAC believes the executive was bribed by six syndicates and received between $18,000 and $150,000 for each container of cigarettes.
In addition to the senior executive, the ICAC arrested 19 others – 12 men and seven women aged between 20 and 50.
Two of the suspects are the executive’s associates, two are employees of the tobacco manufacturer, 11 are employees of five other companies and four are suspected smugglers.
The officers also seized more than $2 million of the suspected bribe money, as well as jewellery and watches. The operation, code-named “Golden Dragon”, began on Monday.
Sources said the money and goods were found in a safe belonging to one of the two arrested associates of the executive.
The investigators believe several companies were set up by the suspects to transfer the bribe money and cover up their activities.
The ICAC believes the cigarettes supplied to the syndicates were ultimately smuggled into the mainland via Southeast Asian countries.
All those arrested have been released on bail.
Investigations are continuing.