The Chinese Cigarette King Who Bankrolls New Labour; $50M Tobacco Contract, [Pound]35,000 Gifts to the Party and Robin Cook's 'Be Nice to China' Policy

By Lewis, Jason | The Mail on Sunday (London, England), April 15, 2001 | Go to article overview

The Chinese Cigarette King Who Bankrolls New Labour; $50M Tobacco Contract, [Pound]35,000 Gifts to the Party and Robin Cook's 'Be Nice to China' Policy


Lewis, Jason, The Mail on Sunday (London, England)


Byline: JASON LEWIS

TONY BLAIR'S Government was facing new sleaze allegations last night after a Mail on Sunday investigation revealed one of its key advisers on China is also a major Labour Party donor.

Secretive businessman Stephen Perry has made millions brokering confidential and controversial deals with the Communist regime in China including a contract - worth at least $50 million - to produce State-approved cigarettes.

At the same time he has been involved in shaping the Prime Minister and Foreign Secretary Robin Cook's softer policy towards China which culminated in President Jiang Zemin's state visit to Britain last year.

Behind the scenes Perry was a key organiser of the visit, which led to criticism of Cook's so-called ethical foreign policy when pro-democracy demonstrators were arrested in Whitehall and Amnesty International accused Britain of turning a blind eye to human rights abuses while large contracts were on the table.

His high-level Government access came as Perry's firms paid huge sums into Labour Party funds. Despite losses, Perry's British companies gave [pound]25,000 to party funds in 1999 and more than [pound]5,000 a year in 1997 and 1998.

But the losses do not take account of his business's overall earnings which are paid through several legal, but secretive, offshore companies which do not disclose any details about their trading or profits.

Questioned in the House of Commons last year about his activities and what exactly he traded with China, Perry said: 'Fundamentally, we consult with medium, large and small corporations on achieving long-term market share in China . . . we get paid on our results. We are not a fee-based organisation.

If we do not deliver, we do not get paid.' The Mail on Sunday has learned that Perry's biggest recent deal, which has earned him huge commissions over the past five years, involved brokering a contract to take over cigarette production in China, where at least 350 million people smoke and ten per cent more a year are taking up the habit.

The deal, set up between American-German company Hoechst Celanese and the state-run Chinese Tobacco Corporation, was initially worth $50 million. But annual profits have run into tens of millions because the contract guaranteed a monopoly market for the successful bidders.

The joint venture Perry set up now produces almost all the filter cigarettes in China including Panda, the official Party cigarettes once chain-smoked by the country's late leader Deng Xiaoping.

Dr Ernest Drew, the senior Hoechst executive who signed the contract, said: 'Stephen Perry was the key factor in the success of the deal. …

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