Razer co-founder and director Lim Kaling exits Myanmar JV
Singapore
RAZER Inc co-founder and director Lim Kaling is selling his entire one-third stake in a joint venture (JV) that owns RMH Singapore Pte Ltd, a Singapore-based tobacco company which owns 49 per cent of Virginia Tobacco Co Ltd (VTCL), the military-linked market leader in Myanmar's tobacco market.
In a statement released on Tuesday, Mr Lim said recent events there caused him "grave concern".
"As a result, I have decided to exit my investment in Myanmar, disposing of my one-third stake in the joint venture that owns RMH Singapore Pte Ltd.
"I am therefore exploring options for the responsible disposal of this stake," he said, adding that it is his only remaining investment in Myanmar, initiated nearly three decades ago under a very different circumstance.
A few days ago, activist group Justice for Myanmar started an online petition to Razer to remove the Singapore businessman from its board unless he ends his business involvement with Myanmar's military.
The petition garnered more than 700 supporters in a couple of days.
Back in 1993, Mr Lim started Distinction Investments to address an economic opportunity in Myanmar as the country was opening up to the rest of the world.
"Through this venture, we had hoped to help the country spur economic growth, create jobs and raise standards of living," he said.
Distinction Investments has three shareholders: Myanmar citizen George Yin Soon, Castlebay Investments and Bright Seasons.
Its directors are Mr Soon, who is also known as Kyaw Kyaw Htun; Mr Lim and Ong Beng Huat, brother of Singapore tycoon and hotelier, Ong Beng Seng.
Mr Lim - who is the chairman of his 100-year old family business Lim Teck Lee Pte Ltd - said he has always been a passive minority shareholder with no direct involvement in the operations of VTCL, which produces the popular Red Ruby and Premium Gold cigarette brands.
Myanmar Economic Holdings Ltd (MEHL), a military-linked conglomerate with a significant portfolio across many Myanmar's industries from banking, tourism, real estate, transportation to gems and metals, holds the remaining 51 per cent stake in VTCL.
Myanmar's commander-in-chief Senior General Min Aung Hlaing - who led the military coup which seized control of the government from elected leader Aung San Suu Kyi on Feb 1 - oversees MEHL. According to an Amnesty International report in Sept last year, the military chief owned 5,000 shares in MEHL in 2011.
In December, Myanmar media reported that RMH was suing MEHL. It wanted more transparency to the monthly donations made in VTCL's name to a fund for disabled veterans. RMH cited scrutiny from Amnesty International and a UN fact-finding mission that examined military business ties in Myanmar to support its calls for an independent audit of VTCL's finances.
Hla Myo, a general manager at MEHL, told Myanmar Now that the problem was due to a "misunderstanding" between the JV partners.
He said the donations were made as part of MEHL's commitment to corporate social responsibility.
Foreign companies that invested in Myanmar have been under pressure from human rights groups for doing business in the country.
Last Friday, Japanese beer giant Kirin - which has been under scrutiny for some time over its relations with Myanmar military-owned breweries - said it was terminating its JV partnership with MEHL.
It said it was "deeply concerned by the recent actions of the military in Myanmar".
In January, Kirin - one of the world's biggest brewing companies, owning brands like Kirin and Tooheys, as well as a major stake in San Miguel and a number of craft beers brewed in the United Kingdom and the United States - said an investigation into whether money from its JVs had funded rights abuses in Myanmar was "inconclusive".
Kirin has a majority stake in both Myanmar Brewery Ltd and Mandalay Brewery Ltd in partnership with MEHL.
The Japanese company said it had decided to invest in Myanmar in 2015, believing it could contribute positively to the people and the economy of the country as it entered an important period of democratisation.
Kirin took a controlling stake in Mandalay Brewery in 2017 at a cost of US$4.3 million, topping off its more than US$500 million investment in leading producer Myanmar Brewery in 2015.
Myanmar Brewery, whose beverages include its flagship and ubiquitous Myanmar Beer brand, boasts a market share of nearly 80 per cent, according to figures published by Kirin in 2018.
Kirin's Myanmar business generated 32.6 billion yen (S$413 million) in revenue in fiscal year 2019-2020, less than 2 per cent of the firm's annual sales.
Shares of Razer, a lifestyle company for gamers, lost more than 3 per cent on Tuesday before settling at HK$2.93, down a cent or 0.34 per cent from Monday's close.
