| By MAUNG MAUNG OO | DECEMBER, 2001 - VOLUME 9 NO.9 |
The Burmese junta is suing Win Win Nu, the former operator of Mandalay Beer, for scaring off investors. Burmese businesswoman Win Win Nu has fallen afoul of Burma’s ruling military government for the second time. Recently, the Burmese generals have been blaming her for the country’s decline in foreign investments, claiming that she gave false information to foreign media. In order to cover up their illegal take-over of her company, the generals have opened a lawsuit against her on three counts for compensation of US $74.3 million and 94.6 million Burmese kyat at Rangoon Divisional Court. Once again, the Burmese generals, who are seeking to attract foreign investment into the country’s paralyzed economy, have shot themselves in the foot. In the eyes of foreign investors, some of whom are wary of entering Burma’s so-called open market, this is just another reason to stay away. This case is one of the most unusual in Burmese business history. Singapore-based Yaung Chi Oo Trading Pte. Ltd. and its managing director Win Win Nu have sued the Burmese government at the International Court of Justice in The Hague for forcibly nationalizing its investment in 1998, and the case is now being heard there. The story began as follows. Win Win Nu signed a joint-venture contract with the head of the Ministry of Industry (1) to operate the Mandalay Brewery in 1993 and jointly set up the Myanmar Yaung Chi Oo Co., Ltd. in 1994. At that time, she had a close confidante who had a good connection with the country’s ruling generals. Her company invested US $6.3 million and 8 million kyat, 45% of the joint venture, and according to the agreement, she was in charge of marketing and operation of the brewery, while the government controlled all the books of the brewery. Under her skillful management, production increased sixteen-fold and the reputation of Mandalay Beer grew. "Since 1886" is the slogan of Mandalay Brewery, and it is one of only a few Burmese products that have managed to stay in business so long. Unfortunately, Win Win Nu’s efforts to maintain the reputation of Mandalay Brewery failed on Nov 11, 1998. On that day about 60 soldiers, fully armed and led by Lt-Col Soe Tin, stormed Mandalay Brewery and ordered Win Win Nu to get out of the factory. "He pointed his finger directly at my face and said that he had come under direct orders of the head of state, and told me to get out of the factory immediately," recalled Win Win Nu. "When I asked him if he meant Sr-Gen Than Shwe, he simply said he had full authority and asked me if I wanted to be arrested." The government froze all of her private bank accounts. "They said that I had been misappropriating funds, even though I had no chance to do it because all books were in their hands," she said. A government official, who declined to be named, told The Irrawaddy that the government terminated this joint-venture agreement on the basis of alleged irregularities discovered during an audit by the Rangoon affiliate of an international accounting firm. They took the matter to court to wind up the company under the "Myanmar Companies Act", and the court dissolved the company according to the act. The question remains: Why did a group of soldiers suddenly take over the factory without following the rules and regulations of joint-venture agreements, if the government had discovered irregularities in accounting? "At that time, Sr-Gen Than Shwe was in Mandalay. Gradually, I have come to realize that Than Shwe gave the direct order to nationalize the company," said Win Win Nu. Many political analysts and Burmese businessmen suspected that Win Win Nu was the victim of a power struggle among the top generals. This may be partly true, but not one hundred percent. In fact, according to elite Burmese business sources, there are many factors involved in this case. One of those factors is the misuse of money from the account of the joint venture by Aung Thaung, Minister for Industry 1. Win Win Nu’s discovery of this misuse is thought to have led her to become an enemy of Aung Thaung, and she fell into his conspiracy. Aung Thaung is believed to be close to Than Shwe. "U Aung Thaung misused the money from our account for a month, with the assistance of auditor U Hla Htun, as he desperately needed to appropriate three hundred million kyat in that budget year. If he hadn’t been able to find it, he would have had a problem," Win Win Nu reported. According to business sources in Rangoon, another possible factor involved in this case is the Union of Myanmar Economic Holdings (UMEH) company—run by the army—which set up a joint venture called "Myanmar Brewery" with Tiger Beer, producing both Myanmar Beer and Tiger Beer in 1996. After that, Mandalay Beer became the biggest rival to the Myanmar Brewery, so finally, the Burmese army ended up nationalizing Mandalay Beer. Currently, Myanmar Beer is in the leading position in Burma’s beer market. At almost the same time, the army-run Myanmar Economic Corporation (MEC), a sister company of UMEH, set up another joint-venture brewery called Dragon Brewery Co., Ltd. and started producing SKOL Beer. After about two years of trying to recoup her assets through the courts in Burma, Win Win Nu fled to Singapore and took her case to the Association of Southeast Asian Nations (Asean), which has an untested dispute-settlement mechanism designed to protect foreign investment. But Asean was unable to help her, although the Burmese generals’ violation of the Asean treaty was obvious. Eventually, she took her case to the International Court of Justice. Not surprisingly, the Burmese government has not mentioned so much as a word about Mandalay Beer in its state-run media. The people inside the country only found out about this case when foreign-based media reported it. Last month, the Burmese Embassy in Singapore sent a notice to Win Win Nu, which demanded that she face a lawsuit at Rangoon Divisional Court. "There is no point in going to Rangoon, because there is no law," she said. "No judges in Burma have the power to evaluate this case impartially. They have to do everything that the generals order," she added. According to sources close to the generals, the Burmese government doesn’t care whether they win or lose at the International Court of Justice, but they want to get credit from people inside the country. They want to show the people that they are right. For this reason, they sued Win Win Nu in Rangoon with their unfair allegations. Although they might lose in The Hague, they can be sure that they will win in Rangoon Court, as she won’t dare to come back to Rangoon. As for Win Win Nu, who still holds a Burmese passport and pays tax to the Burmese government, it is sure that she will become an exile in Singapore and that the Burmese generals will put her name on the list of "destructive elements against the state". "If I go back to Rangoon, they will skin me alive," she concluded.