Attempted hit: Tobacco boss Simon Rudland kingpin of the ‘cheapies’

2019-08-15 11:48
CCTV footage of the alleged attempted hit on Simon Rudland in Johannesburg.

CCTV footage of the alleged attempted hit on Simon Rudland in Johannesburg.

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Simon Rudland, the tobacco boss who was shot in an apparent assassination attempt in Johannesburg on Wednesday, is regarded as one of the pioneers of "cheapies" - illicit cigarettes that dodge annual excise taxes and VAT. 

Rudland, co-owner of Gold Leaf Tobacco Corporation and member of Fair Trade Independent Tobacco Association (FITA), was seriously injured when two men shot at himoutside FITA's offices.

He has since been hospitalised and is being kept in intensive care.

According to the book Tobacco Wars, written by former SA Revenue Service (SARS) executive Johann van Loggerenberg, Gold Leaf's brands have been competing with multinationals since the early 2000s.

EXTRACT | Tobacco Wars: Simon Rudland's empire in Zimbabwe

Van Loggerenberg had spearheaded attempts to clamp down on tobacco tax dodging before getting forced out of SARS in 2015.

The book reveals details around several high-profile cases at SARS during his 16 years at the entity, including the tobacco battles SARS got embroiled in.

Attacks on SARS driven by tobacco industry

In August 2016, Van Loggerenberg released a statement indicating that the initial attacks on SARS, himself and the unit had been driven by people inside the tobacco industry.

"As early as 31 July 2014, SARS was on record that at least the initial attacks on SARS, me and investigative units that I managed were driven by persons associated with the tobacco industry," he said. 

Last year, City Press reported that about 26.8% of all cigarettes sold in South Africa were "illicit" and that this trade was dominated by one local company: Gold Leaf Tobacco.

Van Loggerenberg writes that the brains behind Gold Leaf are Yakub Mahomet and Rudland, both Zimbabweans.

In Tobacco Wars, Van Loggerenberg writes that Mahomet and Rudland first caught public attention in 2006 when a local company, Mavambo, was raided by the Scorpions in March of that year.

Warrants of arrest had been obtained for Rudland, Mahomet and Ebrahim Adamjee, a South African citizen who is a director of Gold Leaf. 

An affidavit stated that Mahomet allegedly operated two related cigarette manufacturing plants, Gold Leaf and Sahawi, which supposedly supplied cigarettes on which no VAT or excise duty was paid, writes Van Loggerenberg. 

READ: Tobacco boss Simon Rudland critical following apparent assassination attempt in Joburg

Adamjee was allegedly in charge of the cash generated from the illegal cigarette sales.

Some of the cash was reportedly laundered through Mavambo and other accounts controlled by Rudland.

He was allegedly also involved in smuggling Sahawi cigarettes. 

But the charges didn't stick and were eventually withdrawn. 

Van Loggerenberg writes that Rudland's empire in Zimbabwe is known as Pioneer Corporation Africa (PCA). Mavambo was a transport company and subsidiary of PCA. 

"As you will have realised by now, no tobacco manufacturer, regardless of size or brand, can claim not to have some skeletons in the cupboard. Gold Leaf is no different," writes Van Loggerenberg. 

In 2013, there was a dispute between Rudland and another "cheapie" pioneer, John Bredenkamp, concerning an amount of around $4.2m. 

And in 2016, Gold Leaf was involved in a court case in Zimbabwe regarding its right to sell cigarettes bearing the brand name RG. The court ruled that the use of the name caused prejudice to the Remington Gold brand owned by Zimbabwean company Savanna Tobacco. 

The following year, Gold Leaf introduced the brand Rudland & George in Zimbabwe, while RG continued to be sold in South Africa. 

Van Loggerenberg writes that, despite its legal battles, Gold Leaf had developed into one of the largest independent tobacco traders in South Africa. 

ALSO READ: The rot runs deep in the tobacco sector

An Ipsos report released in November last year said Gold Leaf Tobacco's RG brand was the top-selling brand in South Africa overall, "overtaking all legal brands". The Ipsos research said the brand sold for an average price of just R10, well below even the R17.85 owed to SARS on each pack sold.

"Gold Leaf Tobacco Corporation (GLTC) now represents 73% of the market for illegal cigarettes. It is on track to become the biggest tobacco company by sales volume in the country, especially if there is another tax increase on legal cigarettes in February 2019," said the Ipsos report.

But Rudland and Gold Leaf have in the past vehemently denied that the company sells illicit products.

"All our brands are registered with SARS and all excise [taxes] are paid on our products," the company told Fin24 in November. 

In April, acting SARS commissioner Mark Kingon said the agency's illicit economy unit was focusing on "serious non-compliance" in the cigarette and tobacco industry.

"Special efforts are also under way to further strengthen controls and improve compliance within the tobacco and cigarette industry," he said. 

In April, the Tobacco Institute of South Africa said in a statement that by 2018 the country was losing more than R8bn per year in evaded taxes due to the exponential growth in the sale of illegal cigarettes.

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