Corruption Scandal in Burma: The Canadian Connection
covering burma and southeast asia
Saturday, December 14, 2024
Opinion
CONTRIBUTOR

Corruption Scandal in Burma: The Canadian Connection


By TIN MAUNG HTOO Friday, March 23, 2012


COMMENTS (1)
RECOMMEND (708)
FACEBOOK
TWITTER
PLUSONE
 
MORE
E-MAIL
PRINT

The Voice Journal, a weekly newspaper based in Rangoon, was threatened with a lawsuit last week by furious bureaucrats upset with an explosive story suggesting that Burma's notoriously corrupt Ministry of Mines engaged in a massive fraud when it resold to Chinese interests what was previously Canadian multinational Ivanhoe Mine's 50 percent stake in Burma's largest mine.

Reports of fraud involving the Monywa copper project should come as no surprise to longtime observers of Burma's natural resources industry. Since Ivanhoe and its founder, billionaire Robert Friedland, first entered into a 50-50 partnership with the Ministry of Mines in the early 1990s, my organization, the Canadian Friends of Burma (CFOB), has been extremely concerned by the secretive manner in which they together operated the massive copper project just outside Monywa.

It was a pleasant surprise therefore to read good, hard-hitting reporting about the Ministry of Mines and the Monywa project coming from The Voice Journal. The ministry's swift response to the report by The Voice, which cited an internal government audit, was something one would expect from a rotten agency that for many years operated as the private funding arm of a brutal military regime, using offshore accounts in Singapore to hide substantial royalties from the national budget.

The Burmese democracy movement and the international media has a duty to stand by The Voice and its journalists who are currently facing financial peril merely for reporting what many in the business community in Burma already knew—that the ministry has been knee deep in blatant theft of the country's natural resources wealth.

Recently disclosed American diplomatic cables made available by Wikileaks give support to The Voice's claims that the Ministry of Mines and other government-controlled entities were engaged in a massive fraud regarding funds resulting from the sale of the Monywa assets.

While the whole story of the Monywa swindles is far from complete, both the cables and the leaked details of the government audit come to together to form a detailed picture showing that the Ministry of Mines and a group of regime insiders conspired to engage in a massive fraud. This fraud was made possible in part by the secretive nature with which Ivanhoe Mines, a firm listed on both the Canadian and US stock exchanges, chose to dispose of its Burmese assets.

According to the leaked cables, infamous Burmese regime crony Tay Za served as a broker in a series of transactions that saw Ivanhoe's 50 percent stake in its joint venture sold first to a government-controlled entity in violation of Burmese sanctions and then resold at a steep profit by the Than Shwe regime to a consortium led by Chinese weapon’s firm Norinco and its subsidiary Wan Bao.

The cables say that Tay Za played a “pivotal role” in the negotiations over the fate of the copper project and was set to receive a US $50 million fee for his involvement in the deal. Tay Za, a close ally of Snr-Gen Than Shwe, is the subject of American, Canadian and EU sanctions.

The information contained in the cables strongly suggests that for more than four years, Ivanhoe deliberately misled its own shareholders about its ongoing involvement in Myanmar Ivanhoe Copper Company Limited (MICCL), a joint venture between Vancouver-based Ivanhoe Mines and state-owned Mining Enterprise No. 1 (ME-1).

The leaked cables indicate that Ivanhoe’s senior management was directly involved in the daily operations at MICCL long past the firm’s supposed withdrawal from Burma in early 2007. This is in glaring contradiction to Ivanhoe’s previously stated claim that the firm stopped being involved in MICCL’s activities after Ivanhoe transferred its MICCL stake into a so-called “third party blind trust” in February 2007.

The Monywa copper project was for many years Burma’s largest mine and one of the top sources of revenue for the Burmese regime. The US embassy in Rangoon spent a considerable amount of time focusing on this controversial project. There are more than a dozen cables that mention MICCL and many quote its general manager, Glenn Ford (sometimes misspelled in the cables as Glen).

A January 2009 cable written by the US embassy in Rangoon and marked “confidential” quotes Ford as telling US diplomats, “In September 2008, ME-1 began negotiating with the Chinese consortium over the purchase of MICCL, using regime crony Tay Za as a broker.



1  |  2 | 3 | 4 | 5  next page »

COMMENTS (1)
 
Please read our policy before you post comments. Click here
Name:
E-mail:   (Your e-mail will not be published.)
Comment:
You have characters left.
Word Verification: captcha Type the characters you see in the picture.
 

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".

more articles in this section