Billions lost in puff of smoke

2015-12-03 10:33

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Pietermaritzburg - About seven billion illegal cigarettes are sold annually in South Africa, costing the government and tobacco industry each in the region of R4 billion per annum in lost revenue.

This is according to evidence in a high court case where R166 650 cash, found to be the proceeds of South Africa’s rampant illicit trade in cigarettes, was forfeited to the state yesterday.

The money was seized from a Stanger man, Dawood Masra, in 2012 after police came across his nephew passing the money in a plastic bag to neighbours for safekeeping.

It is the second time that a court has ordered a large sum of money linked to illegal cigarettes found in Masra’s possession, to be forfeited to the state.

In 2009 Judge Shyam Gyanda authorised the forfeiture of R247 860 in cash which had been seized from Masra in the course of an investigation into his alleged possession of illegal cigarettes.

The seizure of the R166 650, which was the subject of yesterday’s court order, followed the discovery in Masra’s bakkie of 50 cartons of allegedly illicit Kingdom Cigarettes, which are manufactured in Zimbabwe, and four boxes of Kuber Tobacco which is produced in India.

The vehicle had been searched by police and SA Revenue Services customs and excise official, Elijah Wiggill in the parking area of Superb Cash n Carry at Stanger on February 20, 2012.

Police investigators Emmanuel Ngcobo and Manivasagren Perumal said Masra was able to produce invoices from Gwaai Marketing to prove he legally bought some Voyager cigarettes in his possession (although he paid only R130 per carton of 200 cigarettes, which was well below the normal price).

However, he could not produce invoices for the Kingdom cigarettes and Kuber tobacco.

He also did not produce the invoices in yesterday’s court application, claiming that although he had them, he did not want to “burden” the court papers with all his invoices.

According to estimates produced by the tobacco industry in 2011, which were quoted in court papers, around 19 million illegal cigarettes are sold daily in the country.

This adds up to around seven billion cigarette “sticks” per annum which ought to have been sold legitimately.

Financially the sale of illegal cigarettes was estimated to cost the government around R4 billion in lost revenue annually, with similar losses being sustained by the legitimate cigarette and tobacco industry.

Masra opposed yesterday’s application for the forfeiture of the money and said when the state went to the court for the first time to obtain a preservation order over the cash, they failed to tell the judge that the criminal charges against him had been withdrawn.

He also maintained that he legally sells cigarettes, and accused one of the investigators, M. Perumal, of “intimidation and harassment” and of fabricating the case against him.

Perumal responded that he only met Masra for the first time when he arrested him. He had no motive to fabricate evidence against him.

In her judgment, Judge Fikile Mokgohloa said the fact that Masra was not criminally prosecuted was “irrelevant” to yesterday’s proceedings.

This was because the application was based on law which allows for “civil forfeiture” of assets linked to criminal activities regardless of whether there had been a conviction or criminal prosecution. She rejected Masra’s explanation for his failure to produce invoices to prove that his possession of the cigarettes was legal, and the claim that Perumal had fabricated the case against him.

According to court papers, the police seized the money after they saw Masra’s nephew Sadik Lahir pass a plastic bag with the cash to a neighbour.

At the time they said Masra admitted the money was from the sale of cigarettes.

Read more on:    pietermaritzburg  |  cigarette

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