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Myanma Economic Holdings Limited

(Redirected from Union of Myanmar Economic Holdings)

Myanma Economic Holdings Public Company Limited (Burmese: မြန်မာ့စီးပွားရေးဦးပိုင်အများနှင့်သက်ဆိုင်သောကုမ္ပဏီလီမိတက်, abbreviated MEHL or ဦးပိုင် in Burmese) is one of two major conglomerates run by the Burmese military (through the Ministry of Defence), the other being the Myanmar Economic Corporation (MEC).[1][2] MEHL business interests include banking, construction, mining, agriculture, tobacco and food.[3]

Myanma Economic Holdings Limited
Native name
‹See Tfd›မြန်မာ့ စီးပွားရေး ဦးပိုင် လီမိတက်
IndustryConglomerate
FoundedFebruary 1990; 34 years ago (1990-02)
FounderMinistry of Defence (Burma)
Headquarters
Yangon
,
Myanmar
OwnerBurmese military personnel (60%)
Directorate of Defence Procurement (40%)
SubsidiariesMyawaddy Bank
Myawaddy Tours & Travel
Myawaddy Enterprises Group
Pyininbin Industrial Park
Websitewww.mehl.com.mm

MEHL is owned by the Burmese military, and current and former Tatmadaw personnel, and is influenced by senior Tatmadaw leaders.[1][4] Rank-and-file soldiers are required to invest a significant portion of their salaries in MEHL shares, and generally receive an annual dividend in September based on the conglomerate's annual profits.[5][6][7] Revenues generated from MEHL have strengthened the Burmese military's autonomy from civilian oversight, and has contributed to the military's financial operations in "a wide array of international human rights and humanitarian law violations."[4]

UMEHL also operates Myawaddy Bank and the Burmese military's pension fund.[1][8] The headquarters are located on Maha Bandula Road in Yangon's Botataung Township.[9]

History

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The Union of Myanmar Economic Holdings Limited (abbreviated UMEHL or UMEH) was established in February 1990 under the Special Companies Act as the economic arm of the Burmese military, during a period of privatisation and transition from a socialist command economy, with an initial capital of US$1.6 billion.[10][11] UMEHL was established to generate profits from light industry and the trade of commercial goods.[12]

In the 2000s, several state-owned enterprises, including sugar factories, were transferred to the control of MEHL and MEC.[13] By 2007, MEHL wholly owned seventy-seven firms, nine subsidiaries and seven affiliated companies. Its shares are available to military units, active duty and retired military and veterans' groups, returning a 30% profit since 1995.[14]

The MEHL conglomerate is jointly owned by two military departments; 40% of shares are owned by the Directorate of Defence Procurement while 60% of shares are owned by active and veteran defence personnel, including high-ranking military officials of the former ruling military junta, the State Peace and Development Council (SPDC) and veterans organisations. MEHL is exempt from commercial and profit taxes.[15]

In 2010, MEHL opened Ruby Mart, a 50,000-square-foot (4,600 m2) 5-storey shopping complex in Yangon's Kyauktada Township, in a building that once housed the Ministry of Commerce's Myanmar Agricultural Produce Trading.[16] Between 2009 and 2012, MEHL benefited immensely during a mass privatization of state-owned enterprises and assets, acquiring the Bo Aung Kyaw port terminal and the Myanma Five Star Line in the process.[17]

In May 2012, when the United States suspended sanctions against Burma (Myanmar), sanctions against MEHL were kept in place, because of its affiliation to the Burmese Tatmadaw.[18]

In 2016, after the National League for Democracy assumed power, MEHL privatized its operations and dropped "Union" from its name. In doing so, MEHL diverted the company's profits away from the national budget and direct civilian oversight.

In May 2020, the Ever Flow River Group, which is tied to MEHL, was listed on the Yangon Stock Exchange.[17][19]

In June 2020, the Burmese government launched an investigation over conflicts of interest within the two public agencies, the Myanma Port Authority and customs authority, whose managing director and director-general respectively, also sit on MEHL's board of directors.[17] The practice of appointing MEHL directors to run these trade agencies has been in place since 1990.[17]

Following the February 2021 Myanmar coup d'état, in which the Tatmadaw seized power from the elected civilian government, the United States sanctioned MEHL, for its association with and support of the Tatmadaw,[3][20] impounding U.S.-held assets of the company, and forbidding U.S. nationals from doing business with them.[21][3][20] The United Kingdom promptly followed with sanctions of its own.[22] The American and British sanctions, however, were expected to have little impact, because Myanmar's principal trading partners, in Asia, declined to impose sanctions.[22]

Leadership

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MEHL is led by high-ranking Burmese military officials, including members of the ruling military junta, the State Administration Council. Min Aung Hlaing and Soe Win serve as the Chairman and Vice-Chairman of MEHL’s Patrons Group, which oversees the MEHL's board of directors, while Mya Tun Oo, Tin Aung San, and Maung Maung Kyaw are also members of the Patrons Group, and Aung Lin Dwe and Moe Myint Tun are MEHL directors.[23]

Economic interests

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The conglomerate has also been involved in lucrative partnerships with drug lords.[24] MEHL has a monopoly on the country's gems sector and also has a significant portfolio in various industries, including banking, tourism, real estate, transportation, metals,[25] construction, mining, agriculture, tobacco and food.[3] With its affiliation to the Burmese military, which directly ruled the country for almost 50 years, MEHL has exclusive access to secure preferential contracts with foreign firms.[13] Most FDI in Burma is done through joint ventures with MEHL.[26] MEHL is one of 18 Burmese firms involved in the development of the 50,000 acres (20,000 ha) Thilawa Area near Yangon.[27]

Among its subsidiaries include:[15][16]

  • Bandula Transportation
    • Parami Bus
  • Myawaddy Trading
  • Five Stars Ship Company
  • Myawaddy Bank
  • Virginia Tobacco Company Limited
  • Myawaddy Tours & Travel
  • Myawaddy Enterprises Group
  • Pyininbin Industrial Park (in North Yangon's suburbs)
    • UMEH Textile
  • Jade mines (in Kachin State)
  • Ruby and sapphire mines (in Shan State)

Myanmar Brewery

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MEHL has a 45% share in Myanmar Brewery Limited (MBL), which manufactures Kirin Beer,[28] Myanmar Beer, ABC Stout and Anchor Beer.[citation needed] Myanmar Brewery Limited is a joint venture between MEHL and Japan's Kirin Company, which bought the 55% stake of Fraser and Neave Ltd in 2015. Prior to the acquisition, MEHL was involved in a controversial attempt to acquire a majority stake in Myanmar Brewery, which controls over 2/3 of the country's beer market.[29]

Japanese beverage maker Kirin Company owns half of the Myanmar Brewery and Mandalay Brewery, in a business partnership with MEHL.[30] A United Nations report regarding MEHL's ties ownership by the Burmese military surfaced in 2019, which prompted sharp criticism over Kirin's financial relationship with the Burmese military.[31][32] In 2017, Kirin's subsidiary, Myanmar Brewery Limited, made $30,000 in donations toward the Burmese military's clearance operations in Rakhine State.[33] In response, Kirin launched an independent probe to reassess the business partnership.[31]

In February of 2021, Kirin announced it would cut ties with Military controlled Myanmar.[34]

References

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  1. ^ a b c Cheetham, Joshua: "Myanmar coup: The shadowy business empire funding the Tatmadaw," March 9, 2021, BBC News, retrieved March 29, 2021
  2. ^ McCartan, Brian (28 February 2012). "Myanmar military in the money". Asia Times. Archived from the original on 27 February 2012. Retrieved 30 September 2012.{{cite news}}: CS1 maint: unfit URL (link)
  3. ^ a b c d Nunley, Christian: "U.S. sanctions companies that back Myanmar military following coup," March 25, 2021, updated March 26, 2021, CNBC, retrieved March 29, 2021
  4. ^ a b "Economic interests of the Myanmar military". United Nations Human Rights Council. 16 September 2019. Retrieved 7 June 2020.
  5. ^ "No sign of annual payout from Myanmar military conglomerate to soldiers". Myanmar NOW. Retrieved 21 August 2022.
  6. ^ "Why thousands have left Myanmar's military—and why most stay". Myanmar NOW. Retrieved 21 August 2022.
  7. ^ "Junta acknowledges soldiers' payouts from military conglomerate still missing". Myanmar NOW. Retrieved 21 August 2022.
  8. ^ Min Zin (August 2003). "Waiting for an Industrial Revolution". The Irrawaddy. Retrieved 30 September 2012.
  9. ^ "UNION OF MYANMAR ECONOMIC HOLDINGS LIMITED". Excluded Parties List System. U.S. Government. Archived from the original on 20 October 2011. Retrieved 30 September 2012.
  10. ^ Zin Linn (2 June 2012). "Burma and the international development aid and FDI". Asia Tribune. Retrieved 30 September 2012.
  11. ^ Myat Thein (2004). Economic Development of Myanmar. Institute of Southeast Asian Studies. ISBN 9789812302113.
  12. ^ "Myanmar: The Politics of Economic Reform" (PDF). Asia Report (231). International Crisis Group. 27 July 2012. Archived from the original (PDF) on 2 September 2012.
  13. ^ a b Fujita, Kōichi; Fumiharu Mieno; Ikuko Okamoto (2009). The Economic Transition in Myanmar After 1988: Market Economy Versus State Control. NUS Press. ISBN 9789971694616.
  14. ^ David I. Steinburg (2013). Burma/Myanmar: What Everyone Needs to Know. Oxford University Press. pp. 164–165. ISBN 978-0-19-998167-0.
  15. ^ a b Singh, Ravi Shekhar Narain (2005). Asian Strategic And Military Perspective. Lancer Publishers. p. 209. ISBN 9788170622451.
  16. ^ a b "Junta-controlled firm opens shopping centre in Rangoon". Mizzima. 11 October 2010. Archived from the original on 28 September 2012. Retrieved 3 October 2012.
  17. ^ a b c d "Military and allies seek NLD-backed assembly speaker's impeachment". Myanmar NOW. Retrieved 7 June 2020.
  18. ^ Brady, Brendan (7 September 2012). "Boom Days In Burma". Newsweek. Retrieved 30 September 2012.
  19. ^ "Serious corruption risk as Ever Flow River prepares to float on Yangon Stock Exchange". Justice For Myanmar. 26 May 2020. Retrieved 7 June 2020.
  20. ^ a b "Treasury Sanctions Military Holding Companies in Burma," March 25, 2021, U.S. Department of the Treasury, retrieved March 29, 2021
  21. ^ "Burma-related Designations, Designation Update and Designation Removal; Global Magnitsky Designation Update; Counter Terrorism Designation Update; Issuance of Burma-Related General Licenses and Associated Frequently Asked Questions". U.S. Department of the Treasury. Retrieved 4 August 2022.
  22. ^ a b "US and UK ratchet up sanctions on Myanmar's military," March 26, 2021, BBC News, retrieved March 29, 2021
  23. ^ "Min Aung Hlaing and His Generals: Some Biographical Notes". FULCRUM. 4 August 2021. Retrieved 26 September 2022.
  24. ^ Burma: Prospects for a Democratic Future. Brookings Institution Press. 1998. ISBN 9780815775812.
  25. ^ Callahan, Mary P. (2005). Making Enemies: War And State Building in Burma. Cornell University Press. ISBN 9780801472671.
  26. ^ Tin Maung Maung Than (2007). State Dominance in Myanmar: The Political Economy of Industrialization. Institute of Southeast Asian Studies. ISBN 9789812303714.
  27. ^ "500 foreign, local firms get land permits". Weekly Eleven. 30 September 2012. Archived from the original on 2 November 2012. Retrieved 3 October 2012.
  28. ^ "A glance at the beer industry in South East Asia". 23 October 2018.
  29. ^ Gleeson, Sean (7 August 2015). "Time Called on Myanmar Beer Battle as Military Conglomerate Agrees to Buyout Terms". The Irrawaddy. Retrieved 7 March 2016.
  30. ^ Doherty, Ben (15 February 2020). "Drinks giant Kirin reviews Myanmar army ties over genocide funding accusations". The Guardian. ISSN 0261-3077. Retrieved 7 June 2020.
  31. ^ a b "Kirin orders independent probe of Myanmar beer ventures". Financial Times. 6 June 2020.
  32. ^ Doherty, Ben (15 February 2020). "Drinks giant Kirin reviews Myanmar army ties over genocide funding accusations". The Guardian. ISSN 0261-3077. Retrieved 7 June 2020.
  33. ^ "Myanmar: Kirin Should Cut Ties to Military". Human Rights Watch. 18 June 2020. Retrieved 6 July 2020.
  34. ^ Doherty, Ben (4 February 2021). "Kirin beer company cuts brewery ties with Myanmar military over coup". The Guardian. Retrieved 13 February 2021.

See also

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