Corruption Watch criticises NPA over failure to prosecute Adriano Mazzotti

Corruption Watch has accused the National Prosecuting Authority (NPA) of failing to apply the law equally after Adriano Mazzotti a tobacco entrepreneur who admitted to serious offences was not criminally prosecuted. The watchdog said the absence of prosecution, despite Mazzotti’s admissions, risks creating an impression that confession followed by settlement can shield people from criminal liability.

Admissions set out in 2014 affidavit

Evidence leader Advocate Adila Hassim told the Madlanga Commission that Mazzotti, co-founder and chief executive of Carnilinx Tobacco Company, signed a confidential affidavit in May 2014 that detailed a series of offences. According to the affidavit, Mazzotti admitted to unlawful tobacco imports, manufacturing cigarettes “off the books”, conducting illegal surveillance of SARS officials and paying R800,000 in cash to a legal adviser believed to have influence over SARS officials.

Concerns from civil-society groups

Corruption Watch spokesperson Janine Erasmus said any settlement with the South African Revenue Service (SARS) may settle tax debt but does not automatically shield someone from criminal prosecution. Erasmus said the NPA’s inaction raises questions given the gravity of the admitted conduct.

“In this case, we are concerned because when someone admits to the criminal activities that Mazzotti did in his affidavit, and yet he escapes prosecution, it sends a message to other players in that space that confession followed by settlement is a viable exit strategy from criminal liability, not just tax liability. This also is something that favours the wealthy – we cannot all afford to buy our way out of trouble, nor should we,”

“It also undermines and devalues the work of investigators and whistle-blowers, and we might say it could go as far as to create a chilling effect where whistle-blowers might wonder why they should put themselves in danger when the outcome is so disappointing. This is the last thing we need when we are grappling with such high levels of corruption.”

Tax Justice SA founder Yusuf Abramjee said the lack of prosecution despite admissions and long-running investigations is “worrying”, and that the NPA owes the public an explanation.

“If there is not enough evidence to prosecute, it should say so. If there is, South Africans deserve to know why these cases have not reached a courtroom. Nobody should be above the law. Justice cannot depend on wealth, influence or political connections.”

What the NPA and other agencies said

An NPA spokesperson, Kaizer Kganyago, said the matter should be referred to police and SARS and that the NPA deals with dockets that have already been investigated where it must decide whether to prosecute. The article states that SARS did not respond to enquiries by deadline, and that the Financial Intelligence Centre (FIC) said it would respond to queries as soon as possible.

Broader picture: illicit tobacco and enforcement worries

The Madlanga Commission heard that SARS investigations uncovered complex tax non-compliance, off-the-books cigarette manufacturing and unlawfully acquired tobacco linked to Carnilinx, its directors and associates. WhatsApp messages placed before the Commission were reported to discuss illicit tobacco investigations and an unusually close relationship between a Carnilinx director, Mohamed Sayed, and suspended Crime Intelligence Major-General Feroz Khan. The Commission also heard that Khan survived an apparent assassination attempt the week before he was due to testify.

The article cites SARS briefings and National Treasury submissions estimating the illicit tobacco industry as dominating 60% to 78% of South Africa’s market, with a cumulative revenue loss of R119 billion since 2002 and ongoing annual fiscal leakages of R27bn to R28bn. Research from the University of Cape Town’s REEP was reported to show that about 60% of cigarettes sold in South Africa are likely illicit, while a nationally representative study published in Tobacco Induced Diseases found that 75% of cigarettes sold in informal shops are illicit, with over 90% of those illegal products produced by local manufacturers.

The article also reports that the illicit market has prompted major players such as British American Tobacco South Africa (BATSA) to announce the shutdown of local manufacturing plants.

Calls for clarity and accountability

Civil-society groups including Corruption Watch and Tax Justice SA have asked the NPA to explain why Mazzotti was not criminally prosecuted despite his admissions and referrals by state agencies. Corruption Watch said patterns of selective enforcement damage public confidence and the principle of equality before the law.

The Madlanga Commission continues to hear evidence related to illicit tobacco, associated relationships, and allegations presented during its inquiry.