BAT de-merger: legal money laundering

Monday 07 September 1998

ASH/ Press releases/


102 Clifton Street,London EC2A 4HW Tel: (020) 7739 5902 Fax: (020) 7613 0531

Press release7th September 1998 ASH
Action on Smoking
and Health

BAT demerger “legal money laundering”

ASH condemned Tuesday’s BAT Industries demerger as an attempt to place shareholderfunds out of the reach of litigators trying sue the company in the United States andelsewhere. The split will shield BAT Industries’ existing shareholders from about halftheir exposure to multi-billion damages claims.

Clive Bates of ASH said, “What they’ve done amounts to legal money laundering -suddenly the pot available to settle the multi-billion dollar claims has shrunk, allowingBAT’s shareholders to pocket the tobacco millions without facing the full legalconsequences.”

Bates added, “BAT’s tobacco business generated the cash to fund its expansion intofinancial services. Now that cash will not be available to settle giant tobacco legalactions. The money has thus been transferred from risky, volatile and exposed tobacco tothe relative safety of insurance.”

BAT has under-performed the FTSE by about 30% over the last five years anduncertainties over litigation liabilities will continue to dog the new tobacco-onlycompany.



Contact Clive Bates, Director (020) 7739 5902
Amanda Sandford, Communications Director (020) 7739 5902

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