BAT’s local unit cleared of tax evasion charges

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BAT’s local unit cleared of tax evasion charges

The Korean unit of multinational cigarette maker British American Tobacco (BAT) and its executives, all indicted on charges of tax evasion, were acquitted by a local court on Friday.

The Seoul Central District Court acquitted BAT Korea and two of its executives of tax evasion, citing lack of evidence.

BAT Korea, a local unit of the London-based BAT, and its two senior executives in charge of production and logistics, were indicted in April on charges of evading tax worth 50 billion won ($43 million) by falsely reporting a shipment of 24.63 million packs of cigarettes from its factory in Sacheon, South Gyeongsang, to the authorities on Dec. 31, 2014, one day before a cigarette tax hike went into effect.

Prosecutors accused the cigarette company of earning an illegal profit of 50 billion won by selling the 24.63 million packs taxed at a pre-hike rate to consumers at post-hike prices.

But the Seoul court said it is difficult to conclude BAT intentionally committed the false shipment report, judging from the evidence submitted by the prosecution.

“In addition, any motivation for tax evasion has not been found and it seemed that company employees didn’t perceive the concerned shipment report via computers as an illegal act,” the court said.

Guy Meldrum, former CEO of BAT Korea, had also been indicted in the case, but the court didn’t issue a verdict on him.

Meldrum, who left South Korea before prosecutors launched an investigation, had refused to comply with both investigations and court hearings.

The Seoul court said it has deferred its sentence for Meldrum.

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