A TOBACCO company that employs 1,200 people in Southampton is being investigated over alleged bribes.

British American Tobacco (BAT), which has its UK base in Millbrook, is facing an investigation from the Serious Fraud Office (SFO), linked to allegations that it paid bribes in East Africa.

The firm has been in the city for more than a century but ceased cigarette manufacture here more than a decade ago.

Despite this, it now employs more staff than at any time in recent history.

The city site is its global centre for research and development and is also home to IT, finance and distribution departments.

As reported by the Daily Echo in June, more than £80 million of pension funds was being pumped into the company by Hampshire County Council as part of its pension portfolio.

The council tops the list of UK authorities who have investments in tobacco.

The SFO confirmed it had launched a probe focusing on “suspicions of corruption” in the conduct of the business, its subsidiaries or people associated with the firm.

BAT said it was also investigating the alleged misconduct through its own advisers and would co-operate with the SFO probe.

The allegations were first made in a BBC Panorama programme two years ago and centre around claims that illegal payments had been made to civil servants and politicians in East Africa.

Despite the announcement, shares in BAT were up more than 1% in morning trading on the London Stock Exchange yesterday.

In a statement, BAT said: "As previously announced, we are investigating, through external legal advisers, allegations of misconduct.

"We have been co-operating with the Serious Fraud Office and British American Tobacco has been informed that the SFO has now opened a formal investigation.

"BAT intends to co-operate with that investigation."

The FTSE 100 company has formed a board sub-committee to oversee matters concerning the investigation, while it has also appointed an external law firm to spearhead its own investigation.

A spokesman for the SFO said: "The SFO confirms it is investigating suspicions of corruption in the conduct of business by BAT plc, its subsidiaries and associated persons.

"If you have information relevant to this investigation, please contact the SFO through its secure and confidential reporting channel."

When the Echo asked the county council what impact the investigation could have on pensions, chairman of the Hampshire Pension Fund Panel, Councillor Mark Kemp-Gee said: “It would not be appropriate for the county council to comment while these investigations are being undertaken.”