The Messenger journal reported about what Kyaw Ne Win said about the shares he bought from AGD Bank (Right) & Building of AGD Bank (Left)
To investigate whether the share transfer of Asia Green Development Bank (AGD) involves clean money depends mainly on the government and the Parliament. People have urged both to inspect this case transparently in line with the Anti-Money Laundering Law.
Eyebrows were raised following an interview between Kyaw Ne Win – grandson of former dictator Ne Win – and The Messenger Journal in its July-20 edition. Kyaw Ne Win told the journal that he planned to invest US$4.9 billion in Myanmar businesses, and acquire 60 per cent of the AGD bank, which is owned by tycoon Tay Za. Kyaw Ne Win added that he would try to purchase up to 85 per cent of the bank’s share.
“Our business group, including me, have 60 per cent of the shares and are planning to buy up to 85 per cent,” he said.
The July 22 issue of 7Day Daily, however, contradicted this, quoting Wai Lin Oo, deputy managing director of AGD bank, as saying “only 15 per cent of AGD shares had been sold to [U] Kyaw Ne Win”.
Wai Lin Oo said this sale was in line with the amount that the Central Bank of Myanmar had permitted.
However, Kyaw Ne Win reiterated that he has bought a 60 per cent stake in the bank and that he planned to purchase up to 85 per cent of its shares.
In reply to questions from Eleven Media, an executive at AGD said it had more than 610,000 shares and 90,000 of them had been sold with the central bank’s permission.
These were sold to Yin Htwe, Khin Win Maw and Thura Myint of Mikko Group, with the remaining one-tenth (9,000) acquired by Kyaw Ne Win.
As Kyaw Ne Win said that he has purchased 60 per cent of the share, the value of this amount reached Ks 150 billion (about$150 million). Questions have been raised about where this money came from and how much tax – if any – has been paid on it.
From 2002 to 2012, the family of Kyaw Ne Win was not allowed to operate a business. After 2012, it has run a bus line, which has lost money. Kyaw Ne Win admitted the business lost money in his interview with The Messenger Journal.
He also said he holds shares in other businesses but gave few details. He did not name the companies, their sectors, or how much tax had been paid.
“We’re broke,” he told the journal.
The Mikko Group – which purchased a sizable stake of AGD – does not appear in the list of the country’s top taxpayers.
Building of AGD Bank in Kamayut Township (Photo-EMG)
Briefings by AGD have said that the Mikko Group owns most of its shares.
When Kyaw Ne Win said that he owns 60 per cent of AGD’s share and plans to buy up to 85 per cent, he used the phrase “me and my group”. This has raised questions about a possible link to the Mikko Group.
Another point that makes the situation murkier is that he said the China National Corporation for Overseas Economic Cooperation (CCOEC) will help him invest in Myanmar businesses.
It will lend him $4.9 billion, with a repayment date sometime in September 2015. If necessary, the repayment date can be extended as well the amount of funds, according to the interview in the journal.
Kyaw Ne Win added that the CCOEC had been friendly with his late grandfather, former dictator Ne Win.
Currently, between $45 billion and $47 billion of foreign investment has entered Myanmar.
Economist Aung Ko Ko said that the central bank and the government should monitor the entry of an amount that is nearly equivalent to 10 per cent of total cumulative FDI.
“They have purchased the shares of AGD. It would be good to know how they did it,” the economist said. “The rest is up to the Central Bank of Myanmar. As it has been reformed, we assume there are no old procedures. Besides the central bank, the government is also responsible for [looking into] this,” Aung Ko Ko said.
“From my standpoint, the central bank should carry out inspections in line with their duty. It is controversial when the family of a former dictator has been [allegedly] granted $4.9 billion in aid from a company that had a friendship with its grandfather. The media have questioned this dutifully. The central bank and the government are responsible to investigate this case,” said Aung Zaw, editor of the Irrawaddy Magazine.
Although Kyaw Ne Win did not clarify how he would show the money for buying AGD shares was clean, he did say that a electricity generating project will be run by $4.9 billion in aid from the CCOEC.
Former dictator Ne Win’s son-in-law Aye Zaw Win and his grandsons (sons of Aye Zaw Win] Kyaw Ne Win, Aye Ne Win and Zwe Ne Win were sentenced to death for the treason in 2002. Their sentences were reduced to prison terms.
After serving more than 10 years, they were released in amnesties in 2012 and 2013.
Sandar Win, the daughter of Ne Win, was put under house arrest while her husband and her sons were in jail.
During their detention and the period after their release, earnings from their business did not shock the public.
However, the announcement of the acquisition of AGD bank shares and $4.9 billion in aid from the CCOEC purportedly given in a display of “a friendship made by their grandfather” and because “the company believes in them” has astounded the public.
Htin Lin Oo (Wisdom Villa), who writes political features in journals, said the actions and words of Kyaw Ne Win (and his group) will deeply trouble people.
“Many have been jailed in protecting their country and struggled with deprivation after release. When the ones who seek advantage are released from the prison, they become bankers. This is outrageous. Does money enter to their bank account automatically after they released? There was an act done by their grandfather U Ne Win during the era of the Myanmar Socialist Programme Party. In September 1987, he announced that the local currency was illegal. He gave an alleged reason – fake money surged into the country. But the local money was worth billions to citizens. These assets became waste once he announced the banknotes were illegal. I have been wondering all the time where this cash has gone. Now, I assume that the history has given it a comeback,” said Htin Lin Oo (Wisdom Villa).
Htin Lin Oo was referring to banning of bank notes that depicted independence hero Aung San.
Former dictator Ne Win used state funds as though they were his own. This is a matter of historical record.
“He visited European countries with charter flights at a time when the country was mired in the poverty. He toured Germany, Austria and London. He pursued recreation even during critical times. I have talked with his charter flight pilots about this. He used state funds on a grand scale,” said The Irrawaddy’s Aung Zaw.
Myanmar’s modern history books always describe the fact that Ne Win himself behaved like a boss whenever he toured foreign countries and that he ran jewelry shops in some of them. Ne Win used to hold annual gem emporiums during his rule, according to the book “A Famous Head and his Follower in the Time of Dictatorship” published last year by Aung Swan.
There was also talk that the emporiums were his personal auctions, with half being sold and the rest sent to gem merchants in Switzerland. He was said to have received commissions from his “gem friends”, but there is no information on gem-sale figures and how much money – if any – flowed into state coffers from these sales.
Kyaw Ne Win told the Messenger that Ne Win had not opened bank accounts in Switzerland or operated jewelry shops in foreign countries like Germany.
Banking process in AGD Bank (Photo-EMG)
Aung Zaw, however, claimed that he had plenty of evidence of that the former dictator had Swiss bank accounts. “We have yet to know the total amount in the Swiss bank. I have handwritten evidence of former Military Intelligence Chief U Tin Oo whom was jailed by U Ne Win. It was included in the testimony when the court charged him. It covers about 20-30 pages in total. There is one line saying that U Tin Oo helped U Ne Win get his money back from the Swiss bank. This is one example,” Aung Zaw said.
Questions about how Ne Win could save a large sum of money in a foreign bank are inevitable, if he did. He was not born rich and attended university for only two years before becoming a soldier.
“He did not work for the people. The only thing he did was abuse the public’s property. He used to go to European countries rather than Asian countries for medical treatment. He took month-long tours then. He spent state funds during his tour of Austria, East and West Germany, and London,” Aung Zaw said.
“We can imagine the level of his corruption as a dictator. The new government led by President U Thein Sein must expose the corruption and bribery of his family and check the recent investment of $4.9 billion. The next interesting point is that we have to see the revival of oligarchy in the time of Suharto. Suharto and his family and offspring have been rich. It is odd that there is a revival of U Ne Win’s family at a time when President U Thein Sein frequently calls for transparency and accountability,” Aung Zaw continued.
President Thein Sein’s administration has a responsibility to check whether money owned by Ne Win’s family and other corrupt former army generals and their families is clean or dirty.
Kyaw Ne Win told The Messenger that he had become familiar with bankers like Aung Thet Mann, son of Lower House speaker Thura Shwe Mann. He also became friendly with the son of former vice-president Thiha Thura Tin Aung Myint Oo, a former general, as well as Tay Za after his release from prison, Kyaw Ne Win said.
Last year speculation mounted that there are five foreign bank accounts holding $11 billion in total of money siphoned out of Myanmar, but the government and Parliament did not investigate this. Speculation is now mounting that this includes funds sent abroad by Ne Win.
The government, the Central Bank of Myanmar and Parliament need to investigate investments made by Ne Win’s family.
“One idea that crosses my mind is that there might be links between them. Myanmar can reap $10 billion in annual revenue from the export of gas under the new government. We know such kind of information. They [former junta members] paid back the export of gas at a price of Ks 6 to the banks at a time when $1 amounted to Ks 1,000-1,100. At the time, they generated Ks 1,000 in profit. In the olden days, Myanmar had funds in the World Bank at a time when Myanmar had a relation with the Commonwealth. Then, Myanmar formally exited the global financial market. So, the question is: ‘where is Myanmar’s gold?’. We have a duty to find it,” Htin Lin Oo (Wisdom) said.
Some are asking whether the investment and belongings of Ne Win’s family – and former generals and their families – and the flow of other unregistered money may be linked to money laundering. There are many forms of money laundering. In most cases, such cases can be seen in the poor countries with less production capacity and in countries lacking political stability.
The Anti-Money Laundering Law was passed by the Upper House on March 14 this year. The investigation team formed under this law has a mandate to investigate and expose money-laundering cases. The team will have to report to responsible persons or organizations when a suspected case of money laundering is found. The report must be made as quickly as possible to local and foreign partnership associations.
In addition, the team must cooperate and exchange information with local organisations that carry out similar work. Most of those involved in money laundering are: 1) corrupt dictators’ families, and some top leaders of former and current governments and their families; 2) tax-evading cronies and non-crony entrepreneurs; and 3) those who earn money through the drug trade.
The government and the central bank will lose the trust of people and the governments around the world if it fails to investigate this case. It should recheck the purchase of AGD’s shares and investment in dollars by Ne Win’s family. Myanmar might face a financial crisis, like the one that led to the collapse of banks in 2002, again if the government and Parliament failed to investigate this case. People will be in danger losing their savings if banks collapse.
Lawyers also say that legal action could be taken against those involving in corruption, bribery and money-laundering cases at any time in accord with the anti-corruption law and the Constitution.
The AGD case is a litmus test for Myanmar’s banking and monetary system. A proper and thorough investigation can showcase its growing strength to the public and the global community.
http://elevenmyanmar.com/index.php?option=com_content&view=article&id=6921:shocking-agd-bank-revelations-require-prompt-investigation&catid=33:business&Itemid=356
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