Office unaware military conglomerate’s board members also head port authority and customs department, will seek attorney general’s help
Following reporting by Myanmar Now, the president’s office said it will investigate a possible conflict of interest among two board members of the country’s largest military conglomerate.
Kyaw Htin and Ni Aung, two retired military officials, both now serve on the board of directors at Myanmar Economic Holdings (MEHL).
Kyaw Htin, a former brigadier general, is also director general of Myanmar’s customs department. Ni Aung, a former major, is managing director of the Myanma Port Authority.
The potential conflict is perhaps starkest in a port project an MEHL subsidiary is the majority owner of.
Lann Pyi owns 51% of a joint venture with Ever Flow River (EFRG) called Hlaing Inland Terminal and Logistics (HITLC).
HITLC is building a $43m inland port in Yangon’s Hlaing Tharyar township that will include customs clearance and customs-bonded facilities.
Myanmar Now first reported on the potential conflict at HITLC on May 28, the day EFRG was listed on the Yangon Stock Exchange.
Asked on Saturday if their roles as the leaders of Myanmar’s ports and customs departments might conflict with their positions at one of the country’s largest conglomerates - one with large holdings in the import and export industries - president’s office spokesperson Zaw Htay said he would ask the attorney general’s office to investigate.
“We’ll ask for legal advice from the main legal advisory body,” he said in an online news conference. “Based on that, we’ll take legal action.”
He said both men had been on MEHL’s board since the company was formed in 1990 but that neither had ever attended a board meeting or taken an active role in the company.
MEHL was founded by the military in 1990 as the Union of Myanmar Economic Holdings. Besides imports and exports, it operates companies that dominate Myanmar’s transportation, mining, alcohol and cigarette industries.
MEHL shareholders were initially classified into two groups: Type A consisted of the defence ministry and Type B included individual military units and personnel.
After the National League for Democracy (NLD) won landslide elections in 2015 but before they took power in the new civilian government in 2016, MEHL transferred its Type A shares into Type B shares, moving future profits from the public defence budget to the private hands of individual generals.
Zaw Htay is one of many ex-military officials now holding top-tier posts in the civilian government.
So is Htun Htun Oo, the attorney general who will investigate the possible conflict of interest.
It is unknown if either hold shares in MEHL.
Under Myanmar’s Securities and Exchange Law, as a public company with more than 100 shareholders, MEHL is supposed to publish regular financial statements and information on its major shareholders. It must also include this information on its company register with the Directorate of Investment and Company Administration.
It has so far done neither.
“Information on major shareholdings, dividends and financial statements needs by law to be made publicly available by MEHL,” said Vicky Bowman, director of the Myanmar Centre for Responsible Business. “We all eagerly await access.”
A UN fact-finding mission in August 2019 urged all companies to sever ties with MEHL and any of its subsidiaries or partners, including HITLC and Lann Pyi Marine.
The military has increasingly turned to this vast business network to fund “the gravest crimes under international law” - including rape, sexual enslavement and torture - without civilian oversight in Myanmar’s ethnic states, the UN said.
“My working assumption is that dividends are payable to individual shareholders who are current or ex-members of the military, and not to the defence budget. But I haven’t yet seen the proof of this one way or another,” said Bowman.
Kyaw Htin was appointed director general of the customs department by the former Thein Sein government in March 2016, just as the NLD assumed power.
Htun Htun Oo was formerly deputy attorney general under Thein Sein and became attorney general after the NLD transition.
Then-president Htin Kyaw appointed Ni Aung managing director of the port authority in January 2017 and confirmed in December that year.
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