covering burma and southeast asia
Friday, April 28, 2017
Opinion
CONTRIBUTOR

Corruption Scandal in Burma: The Canadian Connection


By TIN MAUNG HTOO Friday, March 23, 2012


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(Page 4 of 5)

Mitchell was described in a US embassy cable dated January 2009 as an “Ivanhoe Representative in Burma”.

While Ivanhoe claimed to be in the dark about MICCL's activities after the blind trust was created, the MICCL website showed that as recently as 2010, Douglas Kirwin, Ivanhoe’s executive vice-president for exploration, remained a director of MICCL, along with Mitchell representing Bagan Copper Holdings, the entity formerly known as Ivanhoe Myanmar Holdings Limited (the British Virgin Islands-based holding firm that held Ivanhoe's stake in MICCL). Oddly enough, Ivanhoe ignored Kirwin’s continued role, with MICCL failing to mention it in any financial reports or corporate filings published after 2007.

Burma’s state-owned newspaper, The New Light of Myanmar, also shows that Kirwin continued to travel to Burma after 2007 and on at least two occasions in September 2009 and September 2010 gave presentations to the Myanmar Geosciences Society.

At both of Kirwin's presentations he was accompanied by fellow MICCL board member Mitchell. Dr. Mitchell, an Oxford trained geologist, was described in The New Light of Myanmar in September 2010 as still being a representative of Ivanhoe Myanmar Holding Ltd (IMHL).

Why Mitchell, a British national, chose to continue working as an Ivanhoe representative and serve on the MICCL board even after the EU had officially placed MICCL on the EU sanctions list is another question that needs to be answered.

A cable dated September 2008 reveals that Ford was of the opinion that the Chinese consortium’s “connections to Tay Za play a pivotal role in the negotiations with the GOB.”

Another cable, dated June 24, 2009, states that Tay Za’s right-hand man, “Lu Lu, a.k.a. Kwan Lu Chan, Chan Kwan Lu, and Zaw Min, is Vice-Chairman of Air Bagan and regime crony Tay Za's top assistant and advisor,” was brokering the deal on behalf of Tay Za.

The cable describes Lu Lu as in the following terms: “Known in business circles to be cunning and ruthless, Lu Lu boasts to businessmen that he taught Tay Za 'all he knows'.”

The June 2009 cable also quotes Ford as telling the US embassy staff “that Lu Lu, working on Tay Za's behalf, acts as liaison with several Chinese companies interested in acquiring MICCL's shares in the Monywa copper mines.”

The cable quotes a businessman based in Burma named George Soon, who provided more details about Tay Za’s relationship with Norinco, alleged weapons sales and the MICCL deal.

The cable states: “Rumors abound that Tay Za has long smuggled Chinese weapons into Burma via his aviation and trading businesses. Soon alleges that Lu Lu, who has close ties to the senior management of Chinese firm Norinco (an alleged arms dealer that has business dealings in Burma), is the mastermind behind Tay Za's involvement in the arms trade. According to Soon, Lu Lu introduced Tay Za to Norinco officials and has secured several business agreements between Htoo Trading and Norinco, including a partnership for a gold mine in Mandalay Division and a broker contract for Norinco's planned purchase of MICCL.”

Exposing and punishing the group of Than Shwe loyalists who engaged in massive fraud is an important step on the road to Burma obtaining democracy. Thanks to both the Wikileaks cables and The Voice Journal's brave decision to publish excerpts from a leaked a government audit, this scandal has been exposed.

Ivanhoe's role in this affair must not and cannot be ignored. Financial regulators in both the US and Canada where Ivanhoe's shares are traded must investigate who at Ivanhoe knew about the involvement of Tay Za in the transfer of the firm's stake in MICCL.

Furthermore, Ivanhoe must be brought to task for a curious accounting trick that it performed in late 2007, nearly seven months after it officially shifted its Burmese assets into the “blind trust.” In regulatory filings both in the US and Canada, Ivanhoe claimed it was “prudent to record a US $134.3 million write down” in the value of their 50 percent stake in MICCL, reducing the value of the firm's Burmese assets to nothing.

While Ivanhoe had previously claimed that the Monywa area represented one of the most lucrative copper deposits in the world, the firm now justified the write down by saying “it was determined that IVN's non-involvement in the Monywa Copper Project operations since it was transferred to the Monywa Trust, the lack of knowledge of the project's current activities and the fact that no sale had been achieved in almost a year since the asset was transferred to the Monywa Trust, indicated that the carrying value of the investment is impaired.”

The aforementioned statement was made in the firm's regulatory filings, which meant that it is extremely misleading, if not downright false.



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tocharian Wrote:
24/03/2012
See, sanctions didn't mean much for charlatans like Tayza. They knew how to get around it. Anyway Canada, like Burma is full of Chinese "agents".

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