Myanmar military's business interests extend far and wide
Singapore
FOR many years, foreign companies venturing into Myanmar have been warned about doing business in the country where the military wields enormous influence.
Various reports including those by Amnesty International and the United Nations showed the omnipresence of the military in the nation of more than 50 million people as it undergoes a challenging transition from military dictatorship to an open society.
The bulk of the concerns lie with the lack of transparency involving the powerful Myanmar Economic Holdings (MEHL), set up in 1990 to support active and retired military personnel.
Together with Myanmar Economic Corporation, the two companies own at least 120 subsidiaries and have close ties to at least 27 more companies, a UN fact-finding mission said. The conglomerates also own two of the country's largest banks, Myawaddy Bank and Innwa Bank.
According to activist group Justice for Myanmar, shares in MEHL are used to reward loyalty and punish dissent in the military. MEHL withholds payments to shareholders who step out of line in the military.
A leaked 2010-11 shareholder report showed dividends were withheld to Major Aung Lin Htut, a high-profile defector, as well as deserters or those who were dismissed.
Soldiers who are loyal and rise through the ranks can buy a higher number of shares and enjoy more profits, it said, adding that shares are sold at the artificially low price of 1,000 kyat (S$1) each.
MEHL's reach is vast, touching nearly every aspect of the economy from banking, trade, logistics, construction, mining of ruby, jade and copper to tourism, agriculture, tobacco, food and beverage. Many foreign companies also rent office space or operate in industrial zones that are owned by MEHL.
MEHL is overseen by 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.
The military chief is also one of MEHL's top shareholders, holding 5,000 MEHL shares and receiving a dividend payment of US$250,000, according to MEHL's 2010-2011 shareholder report.
The general also effectively controls the Myanmar Economic Corporation, which is owned by the Defence Ministry. Under the Constitution, the general appoints the defence minister.
The Amnesty International investigations revealed how international businesses are linked to the financing of Myanmar's military, including many units directly responsible for crimes under international law and other human rights violations.
MEHL shareholder records show that military units, including combat divisions, own about one-third of MEHL's shares.
It is owned by 381,636 individual shareholders, who are all serving or retired military personnel, and 1,803 "institutional" shareholders, consisting of "regional commands, divisions, battalions, troops, war veteran associations".
Among the shareholders were 95 units within the Western Command, the regional command involved in the military's brutal assaults on the Muslim Rohingya in Rakhine State.
Documents showed that from 1990 to 2011, MEHL paid dividends totalling US$18 billion, around US$16 billion of which was transferred to military units.
While it is unclear how this money was ultimately spent, "the size and regularity of these payments suggested that they cover operational costs", said Mark Dummett, Amnesty's head of Business, Security and Human Rights.
Amnesty's findings were in line with the conclusions of a UN Fact-Finding Mission report into MEHL.
