The Chen Zhi Story: What It Means for Habanos S.A.
One of the stranger stories in cigars this past year has nothing to do with tobacco directly. It's a fraud case out of Cambodia that traces back into the ownership of Habanos S.A., the company behind every Cuban cigar sold outside Cuba.
Where It Starts
In 2020, Imperial Brands sold off its handmade cigar business. The American side, Altadis U.S.A., JR Cigar, Casa de Montecristo, went to a company called Gemstone. Everything else, including Imperial's 50 percent stake in Habanos S.A., went to a Hong Kong entity called Allied Cigar Corporation for about 1.2 billion dollars. The buyers weren't named at the time.
It took a few years, but reporting from Radio Free Asia and later documents obtained by the Swedish cigar blog Cigarrvärlden eventually traced the ownership back to Chen Zhi, a Cambodian businessman and founder of the Prince Group conglomerate. Through a chain of shell companies, Chen controlled about 28.55 percent of Habanos S.A., the largest private stake behind only the Cuban government's own 50 percent.
The Actual Case Against Him
In October 2025, U.S. prosecutors indicted Chen for running large scale "pig butchering" scams, where victims are contacted online and slowly convinced to invest in fake schemes. The government said the operation pulled in as much as 30 million dollars a day and relied on trafficked workers held in Cambodian compounds. Authorities seized 127,271 bitcoins tied to Chen, worth around 15 billion dollars, the largest asset seizure in Department of Justice history, and sanctioned him along with more than 100 related businesses.
Where It Hit the Cigar Business
The sanctions reached two factories partly owned through Chen's shell companies: Tabacalera de García in the Dominican Republic and La Flor de Copán in Honduras. Altadis U.S.A. could no longer legally buy from either. Tabacalera de García is the largest handmade cigar factory in the world and made cigars almost entirely for Altadis and JR Cigar, so a lot of jobs were suddenly in question. Production shifted to other factories, including some in Nicaragua, and regular shipments resumed once special licenses came through in May 2026.
Sweden had a smaller version of the same problem. Habanos Nordic, the country's Cuban cigar distributor, had listed Chen as a part owner in filings years earlier. That triggered a government investigation and eventually cost the company its tobacco license. A German and Austrian distributor, 5th Avenue Trading, later paused deliveries over related banking issues.
Chen Zhi Now
Cambodia arrested Chen in January 2026 and handed him to Chinese authorities, revoking his citizenship in the process. In July, prosecutors there charged him with intentionally causing injury by cruel means, a charge that can carry a sentence of ten years to death, along with a copyright infringement charge.
The businesses tied to him have been trying to unwind that connection since the case broke. Tabacalera S.L., which manages the private side of Habanos S.A., said it was working to remove Chen from the ownership structure. A British Virgin Islands court appointed a firm to oversee the liquidation of his stakes, though Chen has contested it. The EU added its own sanctions months later.
The Bigger Picture
No cigar brand or retailer has been accused of anything here. The Cuban government's stake in Habanos hasn't changed. What changed is who else was on the other side of the table, and how much that connection disrupted things once it surfaced.
Separately, Cuban cigar prices have been climbing since 2022, with some limited releases now regularly going for hundreds of dollars, and profit payouts to Allied Cigar Corp have grown right along with them. Whether Chen's exit changes that trend is anyone's guess.