S'pore firm taking Myanmar military conglomerate to court
The action is expected to increase scrutiny of a military whose vast commercial dealings allow it to operate with impunity.
A Singapore company plans to sue a Myanmar military conglomerate over its "oppressive" behaviour, alleging that it has ignored appeals for greater transparency and accountability over their joint venture.
The unprecedented action is expected to increase scrutiny of a military whose vast commercial dealings allow it to operate with impunity, say human rights activists.
RMH Singapore (RMHS) owns 49 per cent of Virginia Tobacco Company Limited (VTCL), the biggest cigarette maker in Myanmar, which employs about 1,000 people. The rest of the company is owned by Myanma Economic Holdings Public Limited (MEHL), a holding company owned by the military with interests in the mining, manufacturing, banking and tourism industries, among others.
MEHL has come under pressure over its opaque role in funding Myanmar's military, which has been accused of genocide before the International Court of Justice.
RMHS' directors are Singapore-based Myanmar businessman George Yin Soon and Singaporean businessmen Ong Beng Huat and Lim Kaling - seed investors in gaming peripherals firm Razer.
In a media statement last week, RMHS said it was seeking relief from the Myanmar courts to protect its and VTCL's interests.
RMHS said it has been calling for changes to the cigarette company's distribution system to comply with local laws. It also "urged greater transparency and accountability in payments made by VTCL, especially monthly donations requested by MEHL".
But the requests have been ignored, said RMHS, adding that it "has also been and continues to be subject to unfair and oppressive treatment by MEHL through threats and unreasonable conduct that is directed not only at RMHS but also adversely affects VTCL, including cutting staff welfare and withholding of staff benefits".
In an exclusive interview with The Straits Times, Mr Soon said: "We are a Singapore-based company. We need to be transparent. We have other businesses and we don't want to be linked to these allegations that we are not doing the right thing, especially on the human rights issue."
Reports by an independent UN fact-finding mission as well as human rights group Amnesty International over the past two years have highlighted how MEHL grows its corporate dominance through joint ventures with foreign companies like RMHS.
The United Nations report last year warned that "the revenue that these military businesses generate strengthens the Tatmadaw's autonomy from elected civilian oversight and provides financial support for the Tatmadaw's operations with their wide array of international human rights and humanitarian law violations".
Tatmadaw is the local name for the military.
Amnesty International, in its September report, said it found that MEHL's shareholders "include military units behind past and continuing crimes under international law and other serious human rights violations across the country".
"MEHL contributes to these violations by knowingly providing funds to these units through the regular payment of dividends."
After the Amnesty report's publication, Japanese beer giant Kirin, involved in two joint ventures with MEHL, said it was suspending dividend payments to MEHL pending an independent probe into the "financial and governance structures" of MEHL.
RMHS alleged in its statement last week that MEHL's actions have "destroyed the substratum of the joint venture" which began in 1993.
Mr Soon told ST: "We believe in the Myanmar legal system so we are proceeding to the Myanmar court. We want to be treated fairly as an investor."
In response to queries from ST, MEHL's general manager Hla Myo said via e-mail that the tobacco company's products are given monthly to families of soldiers killed during battles as part of its corporate social responsibility.
MEHL, he wrote, did not cut VTCL's staff bonuses but scrutinised future ones in light of the pandemic-induced financial difficulty.
He added that MEHL follows Myanmar laws and pays the required taxes.
"We (pay) no attention to foreign organisations' pressure," he wrote.
Justice for Myanmar, an activist group which regularly probes the Tatmadaw's dealings, said that while RMHS' court action was "the right move" and may push the MEHL towards greater transparency, a lot more needed to be done.
Its spokesman Yadanar Maung said: "As an arm of the Myanmar military, MEHL continues to enjoy impunity and immense privilege as a result of its integration in the military structure, which is a systemic conflict of interest."
MEHL, she said, "needs to be reformed by the Myanmar government, which must place the company under civilian ownership".
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