Privatization Linked to Money Laundering

State-owned properties being auctioned off as part of Burma's ongoing privatization drive are attracting some big bidders—thanks largely to the abundance of businessmen in the country with money to hide, according to local business sources.

Since the Burmese regime announced on Jan. 21 that it would be selling off 76 properties belonging to 15 ministries, buyers have been lining up to acquire the choicest assets, often at above-market prices, the sources said.

The properties—an assortment of factories, warehouses and other buildings—are fetching more than they're worth because they can be paid for in cash, no questions asked, the sources added.

“Big business owners are buying these properties at incredible prices,” said one businessman in Rangoon. “They are paying top dollar because there is no need to prove that you money comes from legal sources. All you have to do is pay a 15 percent tax on the purchase price, and the property is yours.”

“In other words, it's just another form of money laundering,” he added.

Among those snapping up the government's latest offerings are some of Burma's biggest names in business: Steven Law (a.k.a. Tun Myint Naing) of Asia World Trading, Zaw Zaw of Max Myanmar Company, Chit Khaing of the Eden Construction Group, and Tay Za of the Htoo Trading Trading Company.

Steven Law, son of drug kingpin Lo Hsing Han and a close associate of the regime's Secretary 1 Thiha Thura Tin Aung Myint Oo, reportedly won the largest number of bids by the time auctioning ended on March 1.

Sources said Law had a distinct advantage: Tin Aung Myint Oo is one of two senior junta officials responsible for implementing the regime's ongoing privatization program, along with Planning and Development Minister Soe Thar.

Although bidding was open to anyone who paid 10,000 kyat (US $11) for an application form and could put down a deposit of 10 million kyat ($11,000), sources said that only those with ties to the regime stood any chance of winning.

For those lacking the necessary connections, however, there was help at hand: For a price, Soe Thar's son Aung Soe Thar could ensure a successful bid, while Nay Shwe Thwe Aung (a.k.a. Pho La Pyay), grandson of junta leader Snr-Gen Than Shwe, also offered similar services.

“If you want a good location for your business, just approach Aung Soe Thar. He will tell you how much to bid and how big a bribe you have to pay him and his father,” said a source close to the Planning and Development Ministry.

“Once a deal has been reached with Aung Soe Thar, his father will release an official notification that a certain property has been removed from the auction list. Then they sell it to the agreed party,” the source added.

Nay Shwe Thwe Aung, on the other hand, exercises his influence through Tin Aung Myint Oo, who is one of Than Shwe's closest subordinates. Sources said that besides acting as a broker for businessmen seeking access to the former general, Nay Shwe Thwe Aung also bought a number of prime properties for himself.

Among the formerly state-owned assets he has acquired are a compound on Rangoon's Kabar Aye Phaya Road that belonged to the Ministry of Industry 1; a former Science and Technology Ministry compound in Yankin Township; a former Department of Atomic Energy compound; and a compound and duty-free market complex previously owned by the Ministry of Industry 2.

Other notable properties that were sold are a one-and-a-half-acre lot at the corner of Tamwe Township and Inya Street, sold to Zaw Zaw for 300,000 kyat ($340) per square foot, and the 25-story Yangon Commercial Tower No. (73/75), close to Sule Pagoda in downtown Rangoon, for which Tay Za paid 7 billion kyat ($7.9 million).

A Rangoon-based businessman said that famous former actress Wah Wah Win Shwe bought the Bayin Cinema, located at No. 321 Bogyoke Aung San Road in Kyauktada Township, for 5.5 billion kyat ($6.25 million), but resold it to a Chinese gem businessman for 8 billion kyat ($9 million). She also owns the Su-Htoo Pan Cinema. 

The Rangoon-based Chronicle website reported that a jade dealer named Yan Chan Win (a.k.a. Sein Win) from Phakant in Kachin State bought some buildings on Kabar Aye Road and a former Ministry of Agriculture and Irrigation compound on the 9 Mile Pyi Road.

The website also reported that the Padonemar Theater and Stadium in Sanchaung Township was also sold, but did not reveal who the buyer was. However, there were unconfirmed reports that Steven Law's Asia World Company bought the property for 50 billion kyat ($57 million).