Possibility of Western sanctions leaves foreign entrepreneurs in Myanmar worried about their future prospects.
Emerging Towns & Cities Singapore Ltd (ETC) has requested that trading in its shares be suspended and said it would conduct a review of its contracts with Myanmar government ministries and departments.
ETC said on Tuesday it would review material contractual payments to the Myanmar government and fundraising proceeds from recent years.
The real-estate developer is among companies being called out by activists over ties to the Myanmar military, which seized power from the elected government in a February 1 coup.
The Singapore Exchange last week issued a list of queries to the company, which is developing a commercial and residential project in Myanmar called Golden City being built on land leased from the Myanmar army.
The connection between ETC and the Myanmar military was called out last week in an article by Justice for Myanmar, self-described as a group of covert activists campaigning for justice and accountability for the people of Myanmar, which said that ETC had a 49-percent stake in Golden City. One of its local partners, the article said, was part of a group of companies owned by cronies of the Myanmar military.
The article alleged that since Golden City was built on a 50-year build-operate-transfer model, the buildings would be fully owned by the military at the end of the contract. It further said that as of December 31, 2019, ETC had accrued $32.185m in land lease payments to the Myanmar army and that over the contract’s life, a maximum of 70 years, that amount would add up to $191.1m.
The report also honed in on some of ETC’s regional banks which, in turn, work with some of the local Myanmar banks which, allegedly, have deep ties to the military.
Steady flow of revenue
The report said that ETC is using the Singapore stock exchange to raise funds that are used to finance war criminals and earns revenue for Myanmar’s military government and it asked that the company be “suspended from trading until they cease payments to the Myanmar Army”.
It added, “the military’s conduct is enabled by their business interests, from deals like Golden City, which provides a steady flow of unrestricted revenue. This incentivises the military to hold onto power and enables them to sustain a crackdown against the civil disobedience movement”.
In a statement posted on the stock exchange, ETC said Justice for Myanmar has extracted information from its various announcements “but then added unverified conjecture” to them. Its investment in Golden City’s holding company, Golden Land Real Estate Development, was made “in compliance with local laws and regulatory requirements,” and after due diligence by one of the “big four” audit firms and legal due diligence by a Myanmar legal counsel, it said.
This is not the first time that Justice for Myanmar has looked into the military’s financial connections.
Last month, prominent Singapore businessman Lim Kaling, co-founder and director of Hong Kong-listed gaming group Razer, said he would divest from a tobacco firm linked to the Myanmar military, following last month’s coup. Lim’s decision came after Justice for Myanmar ran an online petition urging Razer to remove Lim from its board if he did not end his business ties with the Myanmar military.
Similarly, the activist group warned that Myanmar’s military may have access to nearly $6bn in foreign exchange reserves that it could use to further tighten its grip on the country and called on the international community to find and freeze those funds.