Businessman Linked to Habanos S.A. in Asia Faces Possible Death Sentence in China

Chen Zhi, a businessman with dual Chinese-Cambodian nationality, who indirectly controlled nearly 29% of Habanos S.A.—the company responsible for distributing Cuban cigars globally—has been formally charged in China. He faces accusations of intentional assault with cruel methods, a crime under Chinese law that could result in penalties ranging from a decade in prison to life imprisonment or even the death penalty.

The financial publication Caixin, as referenced by cigar industry outlet halfwheel, reported that the charges were filed on July 6, six months following Chen's arrest in Cambodia and subsequent extradition to Chinese custody.

Allegations Beyond Borders

Besides the primary charge, Chen also faces accusations related to alleged copyright violations. His association with Habanos S.A. came to light through documents shared by the Swedish cigar enthusiasts' club, Cigarrklubben CK Sverige AB, and published on the blog Cigarrvärlden.

These documents revealed that Chen had significant control over the cigar company through an intricate network of entities located in Hong Kong, the Cayman Islands, and the British Virgin Islands. He owned a 57.1% stake in the main holding company tied to Habanos S.A., effectively giving him a 28.55% share in the business. This marked the largest private stake in Habanos S.A., second only to the 50% held by the Cuban government.

Global Legal Troubles

Chen acquired his influential position in 2020, as part of a consortium that invested $1.4 billion to purchase Imperial Brands' artisanal cigar operations. This acquisition included the entire Tabacalera USA—parent company of Altadis USA and JR Cigar—along with the 50% of Habanos S.A. previously owned by the British multinational.

Chen Zhi's legal woes extend to the United States. In the fall of 2025, the U.S. Attorney's Office for the Eastern District of New York charged him with allegedly running a criminal organization engaged in a sophisticated cryptocurrency scam known as "pig butchering." U.S. authorities claim the scheme defrauded victims out of up to $30 million.

As part of this investigation, the Department of Justice seized 127,271 bitcoins linked to Chen, valued at approximately $14.7 billion, marking the largest seizure of digital assets in the department's history.

Repercussions on the Cigar Industry

The investigations into Chen Zhi had significant implications for the cigar industry. Following the U.S. indictment, the Office of Foreign Assets Control (OFAC) added numerous businesses connected to Chen to its sanctions list. This move halted Tabacalera USA's orders from the Tabacalera de García and Flor de Copán factories, where Chen held stakes, for over six months.

Shipments resumed only in May 2026, after the U.S. and UK governments issued special licenses to facilitate operations.

Corporate Restructuring Amidst Legal Challenges

In response to Chen's legal battles, Tabacalera SLU, which manages the private shareholding in Habanos S.A., began the process of removing him from its ownership structure. "The company is undergoing a restructuring process to exclude Mr. Chen Zhi from the group," a spokesperson told AFP in December 2025.

Meanwhile, the Eastern Caribbean Supreme Court is overseeing the liquidation of several of Chen's companies registered in the British Virgin Islands, appointing Interpath to manage the proceedings. The primary contender for these assets is the Abu Dhabi-based Renovaire Group, which already owns 42.9% of Allied Cigar. However, the acquisition remains stalled due to ongoing legal proceedings in the British Virgin Islands, New York, and Hong Kong.

So far, none of the investigations against Chen Zhi have led to charges against Habanos S.A., Tabacalera SLU, or the Cuban government. Additionally, neither Cuban authorities nor the company have issued public statements regarding the situation.