Tobacco contracting company Leanrise Private Limited has challenged the industry regulator Tobacco Industry and Marketing Board (TIMB) over the ‘illegal’ cancellation of their license on allegations of breaching provisions of the Tobacco Industry and Marketing Act.
In December, TIMB suspended four tobacco auction companies accused of leasing permits to unauthorized companies.
In a letter dated December 12, 2022, Leanrise said the Act does not specify conducts which are prohibited for industry players.
“Notably, your allegation is that we have breached provisions of the Tobacco Industry and Marketing Act (Chapter 18:20) specifically section 81 (4). Accordingly, this section states as follows; General offences and penalties (4) Any person who does anything contrary to a condition of an authority, licence or permit issued to him under this Act shall be guilty of an offence and liable to a fine not exceeding level five or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment.
“An analysis of s 81(4) of the Act revels that in terms of this provision, there is no conduct, which is specifically prohibited. Rather, this provision just declares guilty a person who acts contrary to express conditions of an authority, licence or permit. Notably, you have not informed us of the express conditions of our licence that we are acting contrary to. However, your letter seems to suggest that we are leasing our licence to Munyasha Tobacco P/L thereby directly facilitating the buying of tobacco by a person without a licence,” wrote Leanrise
The company denied allegations of side marketing and said there was nothing to substantiate such allegations.
“Firstly, this is not a breach of an express or implied condition of our licence. Please note that any tobacco purchased by the use of the Leanrise licence is tobacco purchased for Leanrise. In any event, the Leanrise licence cannot be used to purchase tobacco from growers who are not contracted with Leanrise. This would be side marketing as defined by s3 of SI 77/22. We are not side marketing and there is nothing to substantiate any allegation of such nature,” the company said
Leanrise said they are entitled to have agents who use their licence to advance the company business hence the use of Munyasha Tobacco as their agent.
“If an agent of any buyer, contractor or contract grower violates any provision of these regulations, then the buyer, contractor and contract fanner shall be jointly liable to any penalty set out in these regulations. This means that we are entitled to have agents who use our license for the advancement of our business. There are no provisions, which govern the nature of the contracts we can have with these agents.
“There is no provision that sets a standard agreement for an agents- principal relationship. What is apparent is that upon violation of any of the regulations by the agents, the principal becomes liable. In the instance Munyasha Tobacco P/L is our agent and it is advancing the interests of our business.
“You have not established their conduct that violates any provisions, which we therefore become liable to. It is our considered view that you have not established any legal basis to cancel our licence. Wherefore we object to any such intention. 10. Please note that we endeavour to expand the agenda and best interest of TIMB. In that regard, we look forward to a prosperous and long-lasting relationship with you.” Said Leanrise
