General and Than Shwe confidant to head military-run conglomerate

Wednesday, 29 September 2010 01:37 Ko Wild

Chiang Mai (Mizzima) – Former Coastal Region Command chief Khin Zaw Oo, who is on Britain’s financial sanctions list, has been appointed to head one of the top two military-controlled conglomerates.

Major General Khin Zaw Oo, promoted to the post of adjutant general in a major military reshuffle last month, also took up the position of chairman of Union of Myanmar Economic Holdings Limited (UMEHL), the state-run newspaper New Light of Myanmar reported on Sunday.

The group’s former chairman, Lieutenant General Tin Aye, has retired from his military position, but was still a member of the State Peace and Development Council (SPDC), the junta’s name for itself.

Khin Zaw Oo was a graduate of Rangoon University and also of the Officer Training School (OTS) in Hmawbi Township, one of Burma’s old military academies. Brigadier General Khin Maung Htay has taken over Coastal Command.

According to a 2004 report by Burma Campaign UK titled, “The European Union and Burma: The Case for Targeted Sanctions”, UMEHL and the Myanmar Economic Corporation (MEC) are the two major industrial conglomerates controlled by the military, dominating key economic sectors.

The former’s shareholders were limited to the military establishment, the report said. According to a leaked UMEHL 1995-96 annual report, two of its main objectives were “to support military personnel and their families” and “to try and become the main logistics and support organisation for the military by gradually establishing industries”, in a manner akin to Haliburton’s services to US forces, the report said.

UMEHL has gained monopolies in a wide range of businesses in Burma, such as export of consumer goods, gems, agricultural products, timber, rubber and import of staple foods and cars.

Moreover, the state-run business of Bo Aung Kyaw Port terminal and Burma’s Five Stars Ship Company had been privatised under UMEHL. The group had also bought the building that housed state-run People’s Department Store on Pansodan Street, Rangoon, and renovated it to be reopened as the Ruby Mart shopping centre.

UMEHL also owns Bandoola Transportation Company Limited (a passenger bus and freight firm), Myawaddy Bank and Myawaddy Trading Limited.

Khin Zaw Oo was a close confidant of junta leader Than Shwe, which was the reason for his choice as chairman of UMEHL, a former military officer in exile said.

The Burma Campaign’s 2004 report also said UMEHL had been managing the military armed forces’ pension funds, giving it a ready source of financing.

By 1999, the group had also established nearly 50 joint ventures with foreign firms.

The US State Department’s 2008 investment climate statement on Burma said that to set up a joint venture, foreign firms had reported that an affiliation with UMEHL or MEC proved useful to help them receive the proper business permits.

The report warned however that “entering into business with UMEHL or MEC does not guarantee success for foreign partners. Some investors report that their Burmese military partners are parasitic, make unreasonable demands, provide no cost-sharing, and sometimes muscle out the foreign investor after an investment becomes profitable”.

Even so, dealing with such organs that provide material support to the repressive Burmese regime is illegal in the United States as many of such companies, their leaders and families are subject to EU, US and British sanctions.