Revealed: UK’s overseas aid fund is major investor in company linked to media crackdown in Myanmar

Pic by Nicholas Ganz (Shutterstock)

The UK government’s overseas anti-poverty fund is “urgently looking into” why a business it owns complied with demands from the Myanmar government to block independent media in the country.

CDC Group’s internal probe was triggered by a Finance Uncovered investigation, which has also prompted Labour shadow international development minister, Stephen Doughty to table parliamentary questions on the issue and suggest CDC should sell its stake in the company.

CDC, the controversial investment arm of the Department for International Development (Dfid), invested US$20m in Frontiir last year – a company providing internet services to 1.3 million Myanmar people.

In March, Myanmar’s transport and communications ministry wrote to all of the country’s internet service providers, demanding they block more than 2,000 websites, including 67 news outlets, on the “pretext” they were spreading fake news about coronavirus.

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Frontiir complied with the government’s request, the company confirmed.

Backlash

But this sparked a backlash from Burmese editors, lawyers, and activists.

In a letter of complaint, seen by Finance Uncovered, they accused the provider of flouting human rights law by implementing the government’s orders.

“Your company is helping the Myanmar government censor essential information to vulnerable populations at a period when access to information is key for their very survival”, they wrote.

The Myanmar government, under the watchful eye of the military who retain significant economic and political power, has perpetrated what are widely considered to be serious human rights violations and is violently clamping down on the free media and civil society activists.

The civilian government, which remains subordinate in many spheres to the military, has also overseen the arrest of dozens of dissidents.

When Finance Uncovered asked CDC if it had a view on Frontiir’s decision to comply with the request, a spokeswoman for the bank said it was “urgently looking into these concerns”.

“CDC has clear rules in place to ensure funding does not support any organisation involved in human rights abuses”, the spokeswoman added.

“We condemn action to restrict the freedom of expression of journalists. The UK Government, our owner, repeatedly raises the issue of internet restrictions and shut downs at the highest levels with the Myanmar Government.”

Conflict

Mobile internet is a vital source of information about coronavirus, but it is also used in conflict-torn regions of the country as a way for communities under attack to warn friends and relatives of coming trouble.

In the northwestern region of Rakhine, formerly known as Arakan state, it has been blocked entirely since last June.

Authorities say the internet blackout is an “emergency measure” necessary to crush the Arakan Army, an ethnic insurgency battling for greater independence.

Frontiir operates in two cities in Myanmar and is currently trying to expand into two more. “None of those cities,” a spokesman for CDC said, “are in or near Rakhine state.”

But some of the websites Frontiir and other internet service providers blocked had held the government to account over its handling of the Arakan conflict, fuelling fears the move is a smokescreen for a further media crackdown.

“The list included independent media websites under the pretext that they allegedly disseminate “fake news””, said the complaint.

“[It follows previous directives] to shut down mobile internet access in Maungdaw, Buthidaung, Rathedaung, Paletwa and Myebon townships. This was a continuation of previous shutdown orders”, the letter added.

In March, news editor Nay Myo Lin was detained for 10 days and charged with terrorism offences after he interviewed a spokesman for the Arakan Army, which had been designated a terrorist organisation. His outlet, Mandalay-based Voice of Myanmar, is on the list of websites the government wants blocked.

And news editor Aung Marm Oo went into hiding after he was charged last year under the Unlawful Associations Act, a law critics say is being used against ethnic minorities and to stifle political dissent. His Rakhine state news agency, Development Media Group, has reported human rights violations during the Arakan conflict. It is also on the list of websites to block.

At the time of publication, both websites were blocked in Myanmar.

Meanwhile, hundreds of thousands of minority-Muslim Rohingya are confined in camps in central Arakan, while corona cases are rising.

Urgent questions

“The human rights abuses of the Myanmar Government including in Rakhine state are well known, so CDC have urgent questions to answer”, said shadow international development minister Stephen Doughty.

“If these allegations about Frontiir and their relationship with the Myanmar regime are proven, CDC must immediately divest.”

CDC is the UK’s development finance institution, which is meant to fund poverty reduction projects in the developing world.

It is wholly-owned by the Department for International Development (DfID).

The fund began life in the late 1940s as the Colonial Development Corporation to fund farmers in the British colonies as part of the post-Second World War rebuild.

Its work is currently overseen by Africa minister James Duddridge.

In response to a series of parliamentary questions by Doughty, DfID minister James Duddridge confirmed that CDC has invested $78.8m in Myanmar since 2015 in seven businesses including Frontiir.

CDC has been criticised for pouring cash into shopping centres, gated communities, and luxury hotels in poor countries.

It has also drawn criticism for allowing huge windfalls to senior figures through the sell-off of Actis, one of its investment funds. Senior CDC managers effectively sold it to themselves at below market value, investigative magazine Private Eye revealed in 2010.

More recently, the fund was criticised for failing to properly oversee its investments and prevent human rights violations.

Frontiir said its investment from CDC Group had been ploughed into job-creation:

“[The majority] of Frontiir’s 2100+ employees are Myanmar, and most are under 25 years old who are supporting their families in various regions with remittance”, it said in a statement.

“Frontiir intends to grow beyond urban cities and provide affordable digital access in other regions in Myanmar, including rural hard-to reach areas, while creating jobs for people in Myanmar with CDC’s investment.”

This article originally appeared on the Finance Uncovered

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Junta uses corruption allegations to expand legal case against Aung San Suu Kyi

An ex-convict businessman says that he gave the State Counsellor more than $550,000 in cash when ‘there was no one around.’

Myanmar Now

Published on Mar 18, 2021

Maung Weik (first from left) is pictured near State Counsellor Aung San Suu Kyi at the opening ceremony of a government housing built by his Say Paing Company. (Maung Weik/ Facebook)

The military council announced on March 17 that it would attempt to charge State Counsellor Daw Aung San Suu Kyi, who has been detained since Myanmar’s February 1 coup, with corruption.

The junta’s move is linked to new allegations against Aung San Suu Kyi by businessman Maung Weik. The owner of the Say Paing construction and development company, Maung Weik was formerly imprisoned on drug charges and is known to have close relationships with members of the military’s inner circle.

Military-run media aired a recorded statement made by Maung Weik alleging that he had given Aung San Suu Kyi more than US$550,000 in cash-filled envelopes on the four occasions he met her between 2018 and 2020.

“There was no one around when I gave her the money,” he said in the video statement.

Under Myanmar’s earlier military regime, Maung Weik maintained ties to several generals, including former intelligence chief Khin Nyunt.

He was sentenced to 15 years in prison on drug charges in 2008, but was released in 2014 while the country was led by the military-backed Union Solidarity and Development Party.

Upon his release, Maung Weik founded Say Paing–a construction company–and ran various business ventures through his connections to military officials.

Maung Weik’s wife is also the niece of military-appointed Vice President Myint Swe, who was also the former chief minister of Yangon under the former military administration.

The coup council announced on March 11 that the now-ousted National League for Democracy’s (NLD) Yangon Region chief minister Phyo Min Thein had given Aung San Suu Kyi $600,000 and more than 11 kilograms of gold. The announcement provided no reason as to why the money and gold were allegedly given to the State Counsellor by the chief minister.

A top NLD figure told Myanmar Now that the funds in question were donations to build a pagoda.

“They’re trying to fabricate this and ruin [Aung San Suu Kyi’s] reputation, but the public already clearly knows it’s not true. There’s no need to say anything else,” the official said.

The junta has also accused the Daw Khin Kyi Foundation and an affiliated project, the La Yaung Taw Academy, of losing public funds. The foundation was founded by Aung San Suu Kyi and named after her late mother.

According to the military council, the land lease for the Daw Khin Kyi Foundation’s headquarters, located on Yangon’s University Avenue, is not commensurate with the market price for land in the area. It argues that the country had lost more than 1 billion kyat (more than $700,000) in public funds as a result.

The junta declared that from 2013 to 2021, more than $7.9 million in donations from foreign NGOs, INGOs, companies and individual international donors flowed into the foundation’s three foreign currency accounts.

Also under investigation by the junta is the La Yaung Taw Academy in Naypyitaw, which trains young people in environmental conservation and horticulture in association with the Daw Khin Kyi Foundation. The military said the rate at which the land for the project was purchased came at a discount of at least 18 billion kyat (more than $12.7 million), which was subsequently a loss to the state.

It also reportedly included some plans—such as the construction of a museum—that used funds in a way that strayed from the project’s, and the Daw Khin Kyi Foundation’s, original aims.

“The construction of a building with finance from the foundation for the chair of the foundation has deviated from the foundation’s objective,” the March 17 announcement in the military-run newspaper said.

Prior to the corruption allegations, the military council had hit Aung San Suu Kyi with four charges at the Zabuthiri Township court in Naypyitaw.

She has been accused of violating Section 505(b) of the Penal Code for incitement, which carries a sentence of two years in prison; Article 67 of the communications law for possession of unauthorized items; an import-export charge for owning walkie-talkie devices; and a charge under the Natural Disaster Management Law for not following Covid-19 measures during the 2020 election campaign period.

The military council has not allowed Aung San Suu Kyi to meet with her legal team.

“I’ll most likely see her via video conferencing on March 24 for the next hearing,” lawyer Min Min Soe told Myanmar Now.

The military council has only allowed lawyers Yu Ya Chit and Min Min Soe to take on Aung San Suu Kyi’s case, ignoring the requests of more established legal experts, including Khin Maung Zaw and Kyi Win, to be granted power of attorney.

Myanmar Now

Myanmar Now is an independent news service providing free, accurate and unbiased news to the people of Myanmar in Burmese and English.

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Banks remain mostly closed despite pressure from junta

A month and a half after the military seized power, most banks in Myanmar are barely operating

Myanmar Now

Published on Mar 18, 2021

People queue in front of a KBZ Bank branch in Yangon on March 17. (Supplied)

Banking in Myanmar has come almost to standstill in the more than six weeks since the February 1 coup, with only basic services still available at a limited number of locations.

In the commercial capital Yangon, only a handful of branches of two of the biggest domestic banks, KBZ and AYA, remain open, according to customers.

As of Wednesday afternoon, every bank in the city’s Yankin, Tamwe, Bahan, Thingangyun and South Okkalapa townships appeared to be closed, Myanmar Now found in an effort to confirm these reports.

However, a customer who had used the AYA Bank branch on Sayarsan road in Yankin said it was still open for withdrawals.

Meanwhile, services in other cities were even more restricted. In Mawlamyine, the capital of Mon state, local sources said there was only one KBZ Bank branch still in operation on Wednesday, while all banks were reportedly closed in Bago.

While some banks continue to fill ATMs with cash, few other services are available, bank employees said.

Unhappy customers

Large crowds have been reported at some of the few branches in Yangon that are still dispensing cash, occasionally resulting in tensions between staff and customers.

“At the KBZ Bank headquarters on Pyay road, they were writing down people’s names and phone numbers as the crowd got bigger. They said they would get back to us,” said Aye Aye Phway, a customer who was seeking to withdraw money.

KBZ Bank came under fire on Tuesday when four of its customers were arrested following a dispute with bank staff.

On Wednesday, the bank released a statement denying that it had called the police, as alleged by some who criticized its handling of the incident. It also said that it would assist the customers who had been detained.

According to the junta-controlled broadcaster MRTV, the customers were arrested for pressuring bank staff to take part in the Civil Disobedience Movement (CDM) against military rule.

Pressure from above

A month after many of their employees joined the CDM, privately-owned banks have come under growing pressure from the junta to reopen for business.

Banks that haven’t reopened have been instructed to turn over all of their customers’ information to the state-owned Myanma Economic Bank or one of two military-owned banks, Innwa Bank or Myawady Bank.

The Central Bank of Myanmar would not be responsible for the consequences if banks failed to abide by this demand, the regime warned.

The regime originally issued this order, through the Central Bank, on March 8, to no avail. Despite repeating it again on Wednesday, the situation remains unchanged.

Currently, private banks are required to allow regular customers to withdraw 500,000 kyat per day from ATMs or 2,000,000 kyat per week if they appear at the bank in person.

Companies are permitted to withdraw 20 million kyat at a time, according to Central Bank instructions issued on March 1.

Myanmar has 27 private banks and 17 branches of foreign-owned banks.

Editor's note: This article has been edited to include KBZ Bank's statement on the arrest of four of its customers on Tuesday and the state-owned broadcaster MRTV's claims about the incident.

Myanmar Now

Myanmar Now is an independent news service providing free, accurate and unbiased news to the people of Myanmar in Burmese and English.

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Election sub-commission members released after more than one month in detention

Some of those released were made to sign a statement confirming military allegations of electoral fraud in their respective townships, an official said.

Myanmar Now

Published on Mar 18, 2021

The military regime on Wednesday released all election sub-commission members who were detained following last month’s coup, state and township level election officials said.

The coup regime detained the state, regional and township-level sub-commission members on February 11, ten days after it seized power, and tried to justify the move with unsubstantiated claims of fraud during Myanmar’s 2020 general election.

They members were released on Wednesday morning, confirming rumours on Tuesday that they would be freed.

State and regional commission members were detained at divisional military headquarters, while township level members were detained at guest quarters inside battalion bases.

Some members of township-level sub-commissions were made to sign a statement before their release confirming the military’s findings about voting irregularities in their areas during the November 8 poll, said a chair of a state-level sub-commission who asked not to be named.

But one member of a township sub-commission denied that they had to sign such a statement.

Kyi Myint, chair of the Yangon Region sub-commission, said that the military didn’t ask him to sign anything and there was no interrogation.

“We were summoned and asked to take a rest,” Kyi Myint said.

He added that he didn’t know why the military had allowed them to go home. Nor did he know the situation of members of the union-level commission who were also detained.

Kin Khanh Pawng, chair of the township sub-commission in Kale, Sagaing, was detained in mid-February and was among those released on Wednesday. He said he was called in to help with data and paperwork.

“I had to help them find the data they wanted to see,” he said.

A new union election commission body was formed a day after the military seized state power and arrested civilian leaders on February 1.

The new commission met with 53 political parties on February 26 and officially annulled the results of the 2020 general election.

Another 38 registered parties did not attend that meeting. They include the Shan National League for Democracy, the Democratic Party for a New Society, and the People's Party.