The Sunday Times reports that Gallaher faces fresh accusations of colluding with customs to mislead parliament about alleged complicity in tobacco smuggling, according to legal papers that will be lodged in court this week.

The claim is one of three cases dogging the British firm and threatens to delay the £7.5 billion takeover bid by Japan Tobacco International, which Gallaher’s board has recommended to shareholders.
The legal action, to be filed in Cyprus, is part of a dispute between Gallaher and its former distributor in the Middle East, Tlais Enterprises Ltd (TEL), based in Limassol. At issue is an agreement which senior customs officials authorised in December 2002 and hailed as a breakthrough in their fight to control smuggling into Britain of Gallaher’s key brands – Sovereign and Dorchester. The agreement gave customs the ability to monitor the activities of a major distributor for the first time.
But draft court documents seen by the newspaper and customs sources allege the agreement had a flaw: in return for unprecedented access to its distribution chain, customs allowed Gallaher to sell more than 2 billion “old” and unfit cigarettes with English health warnings on the open market, knowing they were vulnerable to being smuggled back into the high-duty UK and Europe.
Gallaher denies the claims and that is mislead parliament.
(news story)