BAT share price: Company denies accusations of bribing African officials

Equities

Whistleblower says tobacco giant used bribes to undermine anti-smoking legislation

British American Tobacco Plc (LON:BATS) has denied allegations that it bribed politicians and civil servants in countries in East Africa in a bid to undermine anti-smoking legislation.

The BBC’s Panorama programme yesterday aired documents alleging that the tobacco giant arranged bribes totalling $26,000 for three public officials in Rwanda, Burundi and the Comoros Islands in 2012. The documents were provided by Paul Hopkins, a former employee of the company, who said on the programme that he had begun paying bribes after being told it was the cost of doing business in Africa.

"BAT is bribing people, and I'm facilitating it," said the whistleblower. Hopkins, who plans to meet with investigators from the Serious Fraud Office in the UK this week, added that some BAT managers were aware of his activities.

BAT responded to the allegation in a statement issued today: “We are disappointed that the BBC should decide to broadcast allegations made by former employees with a clear vendetta against us, whose employment was terminated in acrimonious circumstances and who present a completely false picture of the way BAT does business,” the company said. “Any company can fall victim to an employee acting inappropriately, but what is most important is how it responds.We do not tolerate corruption in our business, no matter where it takes place,” it added.

Some industry critics, such as Anna Gilmore the head of the Tobacco Control Research Group at University of Bath, have already called for a public inquiry to be held.

In today’s trading, BAT shares were down 0.4 percent at 3,851.00p as of 15:18 GMT. The stock has risen just over 10 percent since the start of the year and the company’s market capitalisation currently stands at £72.4 billion.

The 19 analysts offering 12 month price targets for BAT have a median target of 4,050p, with a high estimate of 4,410p and a low estimate of 3,020p. As of November 28, 2015, the consensus forecast amongst 24 polled investment analysts covering BAT had it that the company will outperform the market. The same consensus estimate has been maintained since April 30, 2015, when the sentiment of investment analysts improved from “hold”.

As of 16:09 GMT, Tuesday, 01 December, British American Tobacco plc share price is 3,861.25p.