THE Zimbabwe Anti-Corruption Commission (Zacc) has launched an investigation targeting 25 tobacco merchants, including global giants British American Tobacco and Tian Ze Tobacco Company, a subsidiary of China Tobacco, over allegations of fraudulently under-pricing tobacco exported from the country, resulting in the loss of millions of dollars.
OWEN GAGARE
Local giant Pacific Cigarette Company of Zimbabwe is also under probe. Both Zacc and the Tobacco Industry and Marketing Board (TIMB) confirmed the investigations.
TIMB is a regulatory and advisory statutory board whose functions include controlling and regulating the growing, marketing and export of tobacco in Zimbabwe. It caters for the interests of all classes of tobacco growers, buyers and other stakeholders.
Zimbabwe is the largest producer of tobacco in Africa and ranks sixth globally. The crop, known as the golden leaf, is one of the biggest foreign currency earners for the southern African nation, alongside gold and remittances.
Last year alone, tobacco earned US$1.2 billion, but Zacc believes more could have been earned, were it not for under-pricing. Zacc investigators are scrutinising export figures from 1 January 2021 to date, after being alerted by whistleblowers.
Companies under investigation, according to documents seen by The NewsHawks, include Zimbabwe Leaf Tobacco, Northern Tobacco, Premium Leaf Tobacco, Mashonaland Tobacco Company, Boost Hail and Cotton Pvt Ltd, Curverid Tobacco, Voedsel Tobacco International and Voedsel Enterprises (Pvt) Ltd.
Investigators are also probing Genotab Traders (Pvt) Ltd, Cutrag Processors Pvt Ltd, Intercontinental Leaf Tobacco, Sahara Leaf Pvt Ltd, Norton Leaf Tobacco, Consolidated Tobacco Processors, Chevron Tobacco Company and Fontshed Investments (Pvt) Ltd.
Other companies under scrutiny are Tinorby Trading, Sub Sahara Tobacco (Pvt) Ltd, Victory Risk Services, Equinox Leaf Tobacco (Pvt) Ltd and Toryblue Investments.
As part of the investigation, Zacc general manager Peter Rwodzi on 11 October wrote to TIMB requesting for documents of the companies under probe.
“The Zimbabwe Anti-Corruption Commission is investigating cases of fraud as defined in Section 136 of the Criminal Law (codification and Reform Act), chapter 09:23 emanating from fraudulently underpriced of tobacco exported from Zimbabwe,” Rwodzi wrote.
“To facilitate our investigation, kindly furnish the Commission with the copies of attachments submitted by the below listed companies when applying for tobacco export permits and subsequent acquittals done in respect of the exported tobacco for the period 01 January 2021 to date.”
After receiving the letter, TIMB acting chief executive officer Emmanuel Matsvaire wrote to companies being investigated, requesting documents.
One such letter was written to Tian Ze managing director Wang Hua on 20 October.
“TIMB received communication from the Zimbabwe Anti-Corruption Commission as attached letter dated 11th October 2022. As indicated in the letter TIMB requests you to submit the information for validation and triangulation for onward transmission to Zacc before end of day Friday 28 October 2022,” Matsvaire wrote.
Asked how the investigations are proceeding, Zacc spokesperson Thandiwe Mlobane said “all we can confirm is that investigations are underway.”
TIMB spokesperson Chelesani Tsarwe said: “TIMB wishes to confirm that Zacc requested for some information to carry out their investigations. As a board we are cooperating with the commission and playing a coordination role and facilitating the submissions of the required documents.”
Tian Ze spokesperson Li Wenjie said his company had supplied TIMB all requested documents. We have nothing to hide and we are open to be investigated. We are not involved in any transfer pricing or anything illegal, so we are fully complying,” Li said.
China is now the biggest importer of Zimbabwean tobacco. The country buys some 62 million kilogrammes of packed tobacco worth US$500 million every year, accounting for well over half of the country’s tobacco exports by value.
Another global giant under investigation, BAT Zimbabwe, is a subsidiary of one of the United Kingdom’s 10 biggest companies.
BAT sells more than 650 billion cigarettes annually. Zimbabwe’s tobacco is in demand globally because of its high quality which is partly attributed to good soils and climate. The country grows some of the finest flue-cured tobacco with minimal chemical residue.
Zimbabwean tobacco is mostly used for flavouring, because of its high quality. Over the years, there have however been concerns that despite the tobacco industry generating more than US$1 billion annually, many smallscale farmers are wallowing in poverty because of an unfair pricing system which often leaves them in debt.
Most of Zimbabwe’s tobacco is grown by small-scale farmers, but the majority have nothing to show for it.
