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B.A.T May Have Condoned Smuggling into China, H.K Judge Says

Hong Kong, June 16 (Bloomberg) -- A Hong Kong judge asked Hong Kong units of B.A.T Industries Plc to answer charges the tobacco company sold ``billions of dollars'' of cigarettes knowing they were going to be smuggled into China.   

Justice Wally Yeung was speaking during hearings to determine who should receive HK$23 million ($3 million) in compensation from Jerry Lui a former employee of B.A.T Industries and its unit Brown & Williamson Tobacco Corp.  

Most foreign tobacco brands are available smuggled in major mainland Chinese cities, without the seals and health warnings that indicate duty has been paid.  

The evidence as adduced by the prosecutions seemed to suggest at all material times BAT was aware, and management of the company was aware, the large quantities of cigarettes worth billions and billions of dollars would ultimately end up the mainland,'' Yeung said in open court, as reported by the Hong Kong Standard newspaper.  

Prosecutor John Reading said: ``The evidence not only 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.''     

Lui, 42, was found guilty last week of having accepted bribes to ensure a constant supply of duty-free cigarettes to a company which smuggled them into mainland China. His trial and conviction followed a lengthy and expensive extradition battle from the U.S. 

22:26:09 06/15/1998


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