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Old 02-26-2006, 03:07 PM   #1
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"ONE of Britain’s biggest tobacco companies has been accused of agreeing to “enlist” the services of a militant Islamic group, according to papers lodged with the High Court last Friday.
Gallaher’s main distributor in the Middle East claims that the firm agreed to an approach to Hezbollah to recoup taxes of £1m that it had paid to the Iranian government, which funds the organisation. If successful, Hezbollah was allegedly promised a “success fee” of up to £287,000.

Hezbollah’s armed wing, which has been blamed for a series of atrocities, is a proscribed organisation in Britain and the United States. Those financing or supporting the group face criminal penalties.

The allegation has been made during an acrimonious legal battle between Gallaher and Tlais Enterprises, its main distributor in the Middle East, Africa and Latin America until last year. Each party is accusing the other of dubious business tactics and a trial is scheduled for the High Court next year.

Yesterday Gallaher, the maker of Benson & Hedges and Silk Cut cigarettes, “denied categorically” that it had entered into any arrangement with Hezbollah. The company, which will announce its financial results for 2005 on Wednesday, counter-claims that Tlais Enterprises is responsible for facilitating the smuggling of its products.

However, Tlais Enterprises, which is owned and run by Ptolomeous Tlais, a Lebanese businessman, states in a High Court claim which was lodged last week that: “Gallaher enlisted the services of a Middle Eastern group (that is proscribed in the US) to negotiate on its behalf, in an attempt to recover the duty.”

The group is Hezbollah, based in Lebanon, and correspondence between Tlais and Gallaher seen by The Sunday Times appears to substantiate the allegation. It is alleged that the plan was aborted after Hezbollah pulled out. It is not known whether the deal was brokered with the political or military wing of Hezbollah.

The UK does not formally ban links to the political party, but the US government makes no distinction between the two.

It is understood that a covert video recording of Gallaher executives discussing the matter will be disclosed in the court proceedings. Gallaher says it has not heard the recording.

The row over the payment of Iranian duties dates back to Gallaher’s decision to become a significant force in the estimated £4 billion Iranian tobacco market in 2002. In October of that year, Gallaher sent a high-powered delegation to accompany Tlais on a visit to Iran. It included Mark Rolfe, group finance director, and Norman Jack, then divisional director for the Middle East.

The company began shipping millions of cigarettes to Tlais Enterprises, via Dubai, from where they were sent on to distributors in Iran. But the cigarettes were found to be unfit for consumption as they had deteriorated, possibly during transit. Gallaher had, however, already paid the Iranian authorities more than £1m in duties to import the cigarettes which it was now unable to sell.

In June 2003, Rolfe and Jack travelled to the Middle East for a heated meeting with Tlais at the five-star Regency Palace hotel on the Mediterranean coast of Lebanon. Also present were Jack’s then boss Mounif Fawaz, Tlais’s brother known as Abu Ahmed, and Tlais’s lawyer Dinos Saveriades.

It was at this meeting that the Tlais Enterprises camp was alleged to have suggested that Hezbollah might be able to use its acknowledged influence with the Iranian government to recover the duty. The plan was said to involve transferring ownership of the cigarettes to Hezbollah, which would then reclaim the taxes. "
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