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A Chinese businessman sanctioned by the United States and the United Kingdom for his alleged involvement in a network of cyber fraud and human trafficking in Southeast Asia is said to have been behind the remarkable surge in the price of cigars in Asian markets.
According to The Standard, a media outlet based in Hong Kong, Chen Zhi, 38 years old, acquired 50% of the shares of Habanos S.A. through the company Asia Corporation, registered in that autonomous territory; the company is responsible for the global distribution of Cuban cigars.
The operation was finalized in 2021, when the British company Imperial Brands sold its stake for $1.4 billion to a consortium of investors in which Chen was reportedly a key figure.
Since that purchase, the prices of cigars have skyrocketed in Asia. A box that previously sold for between 4,000 and 5,000 Hong Kong dollars is now being sold for around 18,000, according to industry sources cited by The Standard. Some special editions have reached values of up to 500,000 Hong Kong dollars at private auctions.
An empire wrapped in scandals
Behind the apparent commercial success lies an international web of corruption, fraud, and human trafficking. According to The Guardian, Chen Zhi —also known as "Vincent"— is the founder and chairman of the Prince Group conglomerate, based in Cambodia and officially engaged in the real estate, financial, and consumer services sectors.
However, the U.S. Department of the Treasury and the United Kingdom accuse him of running a large-scale cyber scam network that exploited trafficked individuals who were forced to commit online fraud from closed complexes in Cambodia and other Southeast Asian countries.
U.S. authorities described the case as "one of the largest financial fraud operations in history," with over 146 individuals sanctioned and the seizure of $15 billion in cryptocurrencies linked to the group's activities.
Chen is currently a fugitive and could face up to 40 years in prison if found guilty of conspiracy to commit electronic fraud and money laundering.
The connection with Habanos S.A.
A research study published by L’Amateur de Cigare, a magazine specialized in the tobacco sector, confirms that Chen Zhi is one of the main shareholders of Allied Cigar Corporation S.L.U., the Spanish company that controls 50% of Habanos S.A. The other 50% belongs to the Cuban government through Cubatabaco.
The discovery arose from an administrative review in Sweden that required Habanos Nordic AB —the official distributor in Northern Europe— to provide documentation about its owners. The documents revealed a complex network of offshore companies leading to Chen Zhi, through structures registered in the British Virgin Islands, the Cayman Islands, and Hong Kong.
The businessman holds, according to the report, the majority of the shares of Simply Advance Ltd., a company that controls other entities down to Allied Cigar Corporation S.L.U., thus completing the link with Habanos S.A.
Impact on the Cuban tobacco market
The revelation scrutinizes the relationship between Habanos S.A., one of the crown jewels of the Cuban economy, and a businessman accused of serious international crimes. It also explains the sudden increase in the price of Cuban cigars in Asia, where Chen allegedly implemented a strategy of exclusivity and auctions that significantly raised profit margins.
Meanwhile, the whereabouts of Chen Zhi remain unknown. Authorities in the United States and the United Kingdom continue their pursuit of the mogul, while his name is now among the most controversial linked to the world of premium tobacco and, now, to Cuba's most recognized commercial emblem: the cigar.
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