FREE ASEAN-FREE MYANMAR-FREE Aung San Suu Kyi | Singapore company divests from Myanmar hotel development subsidiary

The Singapore-based development company Keppel Land will sell its Myanmar subsidiaries Greenfield Development and Straits Greenfield in the latest of a series of high-value divestments by foreign businesses.

The Straits Times reported on Monday that Keppel Land is to receive US$57.4m in cash for the sale of Straits Greenfield, a firm authorised to construct hotels in Myanmar and currently operating the Sedona Hotel Yangon, a five-star hotel with a 29-storey tower overlooking Inya Lake.

The buyer will be Spring Blossom Ventures, about which no information could be found in the regime’s corporate database, and the completion of the sale is expected in the first half of 2023.

At the time of reporting, all publicly accessible information indicated that Straits Greenfield was still under the beneficial ownership of Singaporean nationals.

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However, the Singaporean corporate officers were found to have business relationships with the City Square Tower Company and City Square Office Company. One of the directors of these companies is Aung Zaw Naing, managing director of the Myanmar real estate and construction conglomerate Shwe Taung Group.

The chairman of the Shwe Taung Group (formerly the Olympic Construction Company) Aik Htun—who is Aung Zaw Naing’s father—has been accused by the United States government of involvement in money laundering and narcotics trafficking, as was revealed in a leaked 2007 cable from the U.S. Embassy in Yangon. The allegations against Aik Htun were deemed sufficiently credible to warrant indefinite denial of a U.S. visa.

In contrast to some other foreign businesses that have divested from Myanmar since the 2021 military coup, Keppel Land did not cite political or human rights concerns as reasons for pulling out of the country. According to the company’s public statements, the decision to divest was in keeping with a broader company strategy to liquidate certain capital assets for reinvestment elsewhere.

The $57.4m payment expected for the sale is relatively large. By way of comparison, the Norwegian telecommunications firm Telenor received compensation equal to $105m upon ceasing operations in Myanmar and selling its entire network of 18m subscribers to a domestic, military-linked entity in 2022.

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Activists generally encourage divestment from Myanmar, arguing that international economic ties empower the junta and enable its abuses and violence against the public. However, they have strongly denounced specific steps taken by some international businesses in withdrawing, and Keppel Land’s sale of its shares to Spring Blossom Ventures may not come as welcome news.

Telenor received criticism for allowing its users’ data to fall into the hands of the military-linked company that bought its assets.

More recently, the U.S. fossil fuel corporation Chevron was found to have sold its shares in a joint venture with the Myanmar military-owned company Myanmar Oil and Gas Enterprise (MOGE) to the Canadian-owned company MTI.

Having initially hailed Chevron’s divestment from the venture as a victory against the regime, activists were disappointed to find that Chevron’s investment had effectively only been transferred to another international company, and reiterated their call for direct sanctions against MOGE by foreign governments.

MOGE is the Myanmar military regime’s single largest source of foreign revenue, but neither Canada nor the U.S. has imposed sanctions on the entity.

Economic conditions were already deteriorating in Myanmar before a recent expansion of sanctions against the military regime and its network of cronies by the governments of the U.S., United Kingdom, Canada and Australia. However, it is unclear to what extent these circumstances have influenced foreign businesses’ decisions to divest from Myanmar since the 2021 coup.