(Bloomberg article from the BANGKOK POST on 18 October 2022.)
It’s one of two houses his family owns in a
development overlooking the South China Sea known as a playground for the
wealthy. A short drive away is the Marina Bay Sands casino, where he would
often show up carrying a duffel bag stuffed with cash. On a sunny day in June,
a yellow Ferrari F8 Spider and a Mercedes were parked outside one of the
villas.
Singapore has long been a haven for sanctioned Myanmar businessmen, including Tay Za, who has been accused by the US and others of supplying arms and equipment to the military. He has maintained the right to live and work in Singapore despite sanctions first imposed by the US in 2007 and has incorporated about 10 companies there with operations in palm oil, teak and aviation.
The US sanctions
against him and other supporters of the regime were lifted in 2016 after
democratic elections in Myanmar, then reinstated earlier this year following a
February 2021 coup that forcibly removed Aung San Suu Kyi from leadership.
Most Asian
countries, including Singapore, don’t support the sanctions. Singapore Prime
Minister Lee Hsien Loong has said they would only hurt the people of Myanmar
and have pushed that country closer to China.
When asked about
Tay Za and Singapore’s policy on Myanmar, a spokesperson for the Foreign
Ministry pointed to previous statements by Foreign Minister Vivian
Balakrishnan, who called the situation there “a tragedy”. The minister has said
Myanmar needs to resolve its conflicts internally and that people shouldn’t
overstate his country’s influence.
That stance is becoming increasingly difficult to maintain as the US ramps up pressure on the junta and global financial regulators weigh blacklisting the country. There are signs Singapore is moving away from its policy of not interfering in the affairs of neighboring countries.
It has
criticized the military regime, asked banks to heighten their scrutiny of
financial flows to Myanmar and stopped authorizing the transfer of any items
that may be used to inflict violence against unarmed civilians. But sanctioned
arms dealers including Tay Za, who has denied the allegations, continue to
operate other businesses openly in the city-state.
“Singapore was
at first very reluctant to impose sanctions on the military government, fearful
of the impact that it would have on the financial sector,” said Zachary Abuza,
a professor at the National War College in Washington who specializes in
Southeast Asian politics. “It has started to crack down on some military-linked
corporations that are operating in the city-state, but there remain a large
number conducting business in Singapore, which provides a financial lifeline
for the military as well as a conduit of weapons, munitions and spare parts.”
Leaked 2007 US
State Department cables called Tay Za Myanmar’s “number one crony businessman”,
citing his connections with Russian aircraft manufacturers. One of the cables,
written by a US embassy official in Yangon and published by WikiLeaks,
described how he leveraged his relationship with a Russian ambassador to become
the sales representative for companies that supplied Myanmar with arms,
ammunition, MI-17 helicopters and MiG-29s.
The UK
sanctioned Tay Za in September 2021, saying he “is associated with the military
through his extensive links with the former and current junta regimes”.The US
Treasury added him to its sanctions list in January, saying he had provided
weapons and equipment to the armed forces and traveled to Russia in May 2021
with the head of Myanmar’s air force at the time.
The US also sanctioned Tay Za’s sons, Pye Phyo and
Htoo Htet, who were deemed “instrumental” to his dealings with the junta, as
well as his company, Htoo Group.
Russia was second only to China in selling arms to Myanmar over the 10 years ending in 2021, according to the Stockholm International Peace Research Institute, or Sipri, which tracks international arms sales. The group said 30 combat-capable aircraft were delivered in the second half of that period, including 20 from Russia and 10 from China. While most countries build up stockpiles for defence, Myanmar’s military, known as the Tatmadaw, has employed them for campaigns against its own citizens and the Rohingya minority, Sipri said.
Siemon Wezeman,
a senior researcher at Sipri’s arms-transfer program, said the use of middlemen
like Tay Za is common in countries such as Myanmar. “They have the knowledge,
the contacts and help oil the wheel,” he said. “It’s not that they are doing
anything illegal, but they can help facilitate financing and transportation of
arms.”
As recently as
2018, when sanctions against Tay Za weren’t in effect, representatives of his
Yangon Aircraft Engineering Co met with Myanmar Air Force delegates to discuss
the conversion of ATR 72 aircraft for cargo and troop transport at an
approximate cost of $550,000 each, according to leaked minutes of the meeting
published by Justice for Myanmar, a group that investigates and campaigns
against entities supporting the junta. Another leaked document from November
2017 cited Tay Za’s Myanmar Avia Export Co as the partner of JSC Russian
Helicopters.
A 2019 United Nations Human Rights Council report
called Tay Za’s Htoo Group, one of “the largest crony companies” in Myanmar. It
was among donors to the Tatmadaw in September 2017, the report said, after the
armed forces began what it called “clearance operations” against the Muslim
Rohingya population in western Rakhine state that resulted in several thousand
deaths and the displacement of an estimated 870,000 people.
Major General
Zaw Min Tun, lead spokesman for Myanmar’s ruling State Administration Council,
declined to answer questions about Tay Za, arms sales or sanctions against the
country. “We can’t answer these,” the council’s information office wrote in an
email.
‘1,000% never’
Tay Za denies
he’s an arms merchant. In a 90-minute interview from Putao, a picturesque town
in the Himalaya foothills where he owns a resort, the 58-year-old businessman
said he has provided only transportation equipment, not weapons, to Myanmar’s
military. He said he has suffered financial setbacks as a result of the
sanctions, including having to close his airline because he couldn’t obtain
insurance, and is now semi-retired because of health issues. “I don’t trade
arms,” he said, his round face becoming animated on a computer screen. “1,000%
never.”
His two sons
joined the call. Heir apparent Pye Phyo, 35, dialed in from Yangon in Myanmar,
and Htoo Htet, 29, who runs the family bank, was at the W Hotel on Sentosa.
Both went to an international school in Singapore, speak excellent English, and
chipped in with occasional translations for their father.
“The media has
caricatured my relationship with the armed forces,” Tay Za said, explaining
that he had a good rapport with the military until 2011, though his “proximity
to the government at the time was exaggerated”. He insisted he didn’t go to
Moscow last year because of pandemic travel restrictions, disputing US Treasury
allegations and a May 2021 report in the Irrawaddy, a publication run by
Myanmar journalists in exile.
The publication,
citing unnamed sources, said he flew in a private jet from Singapore to
Naypyidaw, the capital of Myanmar, for meetings with senior junta officials
before attending a military exhibition in Moscow with Myanmar’s then air force
chief. “Those allegations were entirely false,” Tay Za said.
A copy of Tay
Za’s Myanmar passport seen by Bloomberg News bears no stamps for travel since
its issuance in April 2020. But holders of a Singapore employment pass like Tay
Za can have their passports scanned electronically rather than stamped,
according to the website of Singapore’s Immigration & Checkpoints
Authority, which processes arrivals and departures. An ICA spokesperson said
the agency couldn’t comment about individuals and declined to say whether Tay
Za left Singapore in May 2021.
Other records
provided by a representative for Tay Za, which the person said showed his
comings and goings from the gated residence on Sentosa, show that he left the
house at 1am on May 17, 2021, and returned at 4pm on May 21 – enough time to
attend the military exhibition from May 20-22, but not enough to quarantine for
21 days in a designated facility, as he would have been required to do under
the city-state’s pandemic rules in effect at the time.
Aung Zaw,
editor-in-chief of the Irrawaddy, said he stood by his publication’s story. The
US Treasury declined to comment.
Tay Za said he
would meet in Singapore to answer further questions, then withdrew the offer. A
representative for his company said in an email that the 2018 plane-conversion
project was “civilian in nature” and did not proceed. He also denied that
Myanmar Avia Export was a partner of any international firm.
While the latest
sanctions haven’t forced the junta to change its policies, they have taken a
toll on Tay Za. The UK has banned him from traveling to its territories. A
joint venture with Singapore-based Banyan Tree Group for management of 17
hotels in Myanmar has stalled as a result of what a Banyan Tree spokesman
describes as “the present situation.”
And earlier this
year, the Marina Bay Sands, owned by US-based Las Vegas Sands Corp., told him
he’s no longer welcome to gamble there. (That ban may be a boon for Tay Za, who
had lost about $70 million at baccarat tables there, according to a person with
knowledge of the matter. ) The casino company declined to comment.
Still, he is
free to come and go as he pleases. “Singapore remains a central business and
financial hub in the region, with corporate services of the highest standard,”
Tay Za’s representative said. He “enjoys the Singaporean lifestyle, food, and
environment, and over time has built strong relationships with friends in
Singapore.” The representative declined to comment about Tay Za’s wealth or
gambling habits.
 |
| Tycoon Tay Za (Right) with singer Zaw Win Htut. |
Family connections
Tay Za’s family
connections helped pave his way in both the military and business worlds. His
father, Myint Swe, took the top job at the Tatmadaw Military Research Unit, an
equivalent to the US Central Intelligence Agency, after completing a training
course at Fort Benning in Georgia, according to a book published by the family
after his 2008 death. Myint Swe’s friendship with Ne Win, the army general who
seized power in a 1962 coup, helped his youngest son win the armed forces’
trust.
Tay Za married Thida Zaw in the early 1980s after
dropping out of a military school. Her family owned Htoo Group, which at the
time operated a rice-milling business. Tay Za expanded it into teak trading,
aviation, construction, hospitality and banking while making friends with top
officials, including Than Shwe, head of state for two decades until 2011.
According to one
leaked US cable, Tay Za hired the ruling junta’s children, giving them senior
roles in his businesses despite their lack of experience. In return, the
document said, he was granted lucrative concessions, including one of the few
licenses to import cement when the country was building its new capital
Naypyidaw. When Tay Za won an exclusive liquor import permit, he gave the
20-year-old son of a former air force chief $200,000 to operate retail outlets,
the cable noted.
Two years after
President Bill Clinton first blacklisted Myanmar in 1997, Tay Za incorporated
his first two companies in Singapore, Pavo International Pte and Pavo Trading
Pte. Company filings say they were for “wholesale of logs, sawn timber, plywood
and related products.” In 2004, a year after President George W. Bush imposed
an import ban on products from Myanmar, Tay Za registered Air Bagan Holdings
Pte. Another Singapore-based entity, Terrestrial Pte, started in 2007, the year
Bush expanded the punitive measures.
Oasis of calm
Like many
wealthy people, Tay Za was drawn to Singapore because it offers stability and
anonymity. The city-state is an oasis of calm compared with its Asian
neighbors. Since its separation from Malaysia in 1965, it has been governed by
one party, co-founded by Lee Kuan Yew, who developed the country into a global
financial and commercial hub.
As the world’s third-largest offshore financial
center after Switzerland and Hong Kong, Singapore attracts funds from all over.
Firms there held $3.5 trillion worth of assets in 2020, about three-quarters of
them from overseas, according to a central bank survey. Banks and wealth
managers cannot disclose clients’ personal information except to regulators or
under court order.
Business
incorporation is a big industry in Singapore, and more than 560,000 firms were
registered there as of July. Serena Lee Chooi Li is among the beneficiaries.
The Malaysian lawyer is or has been the corporate secretary of more than 200
companies, according to her 147-page profile at Singapore’s corporate registry.
Among the active ones are Tay Za’s Pavo Trading,
where Lee has been secretary since 1999. She also serves or has served about a
dozen other entities linked to Tay Za and his family, most of them registered
at the same business address on the 6th floor of the Bharat Building, where
Lee’s firm is located. Lee declined to comment.
Pavo Trading has
been listed by the US as part of Tay Za’s financial network as far back as
2008. Today, the company remains “live” and solvent on Singapore’s corporate
registry, which shows the most recent annual general meeting was held June 30,
2021. Tay Za is listed as managing director, director and majority shareholder.
Thida Zaw, from whom he is separated, is the other shareholder. The company is normal; text-align: justify;">
named after El Pavo, one of his favorite cigar brands.
While only two
of the 10 Singapore-based firms listed under his name are active, the real
picture may be more complicated. A dozen other companies were held by his
employees or family members as of this year. His sister, Thida Swe, owns Frontier
Gold (Singapore), which was active until May. His younger son, Htet Htoo, is a
shareholder and director of three Singapore companies. Teo Ah Peng, an
employee, is or has been a director of six active companies, some of which have
the same address at the Bharat Building.
Tay Za’s Sentosa villa was bought with a mortgage
from the Singapore unit of Malayan Banking Bhd., Malaysia’s largest bank,
according to records at the local land authority. Although the amount of the
mortgage isn’t disclosed, a villa of similar size can fetch as much as S$15
million ($10.7 million) in today’s market, according to property firm ERA
Singapore.
A house held
under his sister’s name, facing one of the island’s golf courses, has a
mortgage with United Overseas Bank Ltd, Singapore’s third-largest bank. That
house was purchased in 2012 for S$15.3 million, public records show. A
spokesperson for Maybank said it couldn’t comment about individual customers
but that it follows all applicable laws and regulations. UOB didn’t respond to
requests for comment.
Singapore is the
largest foreign investor in Myanmar with a total of $25 billion flowing into
the poorer country since 1989. Keppel Corp., which counts state-investment firm
Temasek Holdings Ltd. as its biggest shareholder, has investments in Myanmar,
as does sovereign wealth fund GIC Ltd.
The money has
continued to flow since the 2021 coup, despite the sanctions and the deaths of
more than 2,000 civilians, according to an estimate by the Assistance
Association for Political Prisoners, a human rights group based in Thailand.
Myanmar government records show that $297 million of investments came in from
Singapore in the six months ending in March.
US pressure
The 10 members
of Asean, the Association of Southeast Asian Nations, have generally avoided
criticizing and interfering in each other’s affairs. But that has been changing
since the coup. Asean has taken the position that Myanmar’s leaders have failed
to observe an April 2021 agreement to end violence in the country, and it
excluded them from a summit in Brunei last October.
Earlier this
year, Singapore’s foreign ministry called for the release of all political
detainees in Myanmar, including Aung San Suu Kyi. At an Asean meeting at the
White House in May, an empty chair was put out at a lunch to represent the
overthrown civilian government.
Singapore
usually complies only with sanctions imposed by the United Nations, rather than
unilateral measures, and the UN hasn’t taken such action against Myanmar. But
Singapore hit Russia with targeted financial sanctions in March after the
invasion of Ukraine, even though the UN didn’t act.
The US has been pressuring its Asian ally to get
tougher on Myanmar, and there are signs that Singapore is responding. Last
October, State Department Counselor Derek Chollet visited the Monetary
Authority of Singapore, the country’s central bank, and said the city-state has
“significant financial leverage” over Myanmar. His statement came after the
central bank said in February 2021 that it didn’t find “significant funds” from
Myanmar companies and individuals at banks in Singapore.
That position
hasn’t changed, according to a spokesperson for the central bank, who
acknowledged that financial institutions in Singapore have been placed on
“heightened alert in relation to risks emanating from the situation in
Myanmar.” In September, Singapore said in a statement at a United Nations Human
Rights Council session that it expects banks “to remain vigilant to any
transactions that could pose risks, including dealings with companies and
individuals subject to financial sanctions by foreign jurisdictions.”
The Financial
Action Task Force, a Paris-based global watchdog, placed Myanmar under
increased monitoring in February 2020 for failure to strengthen its
anti-money-laundering controls and will consider blacklisting the country at a
meeting starting Oct. 18.
DBS Group Holdings Ltd, based in Singapore and
Southeast Asia’s largest lender, has closed accounts of some Myanmar nationals
residing in Singapore, including several who have raised funds to fight the
junta, people familiar with the matter said.
In a letter sent
to some account holders in June, DBS said it had observed “unusual activities”
involving the accounts and would be closing them in 30 days. Some of these
individuals later were able to open new accounts at other Singapore-based
banks, according to the people familiar.
A spokesperson
for DBS said the bank doesn’t comment about individual clients and doesn’t
impose any political views on its customers. Unusual activity, the spokesperson
said, “can be linked to criminal activity, contravenes our policies, or
otherwise represents an unusual or suspicious increase in size and volume of
transactions.”
Singapore’s
stricter stance has also affected companies that haven’t been sanctioned and
have no obvious connections to the junta. “We are seeing that banks these days
are increasingly strict when it comes to new account openings by Myanmar
individuals or entities,” said Chester Toh, a partner at Rajah & Tann, one
of Singapore’s largest law firms, who helped set up the firm’s practice in
Myanmar. “Banks which used to be quite happy to do business with Myanmar
businesses are getting cold feet, and it has been difficult for Myanmar
businesses looking to restructure or pivot away from Myanmar.”
Meanwhile,
Myanmar’s central bank, facing deteriorating economic conditions, plunging
local currency and a shortage of dollars, has imposed restrictions, including a
requirement that firms earning in foreign currencies convert their revenue into
Myanmar kyat within one working day at a fixed rate much lower than the black market
price. In July, the regulator asked debtors to halt repayments of foreign loans
to defend the nation’s dwindling foreign-exchange reserves.
There is no reliable estimate of how much Myanmar
money is parked in Singapore, but several individuals sanctioned by the US have
long-term employment passes in the city-state and businesses there, according
to corporate registry filings.
Naing Htut Aung,
accused by the US in March of procuring arms from Chinese companies while
having ties to the junta leadership, owns at least two companies registered in
Singapore. His address is a 44th-floor apartment at the Orchard Residences,
atop a mall on the country’s most famous shopping street. The unit is owned by
his wife, Wai Wai Yin, who is not sanctioned and has been a director of his
Singapore-based companies, government filings show. He didn’t respond to emails
seeking comment.
Aung Hlaing Oo,
described by the US Treasury as a central figure in planning a
weapons-manufacturing plant in Myanmar, owns M C M Pacific Pte, a steel-trading
company registered in Singapore since 2006. United Overseas Bank has been the
firm’s banker, according to a 2017 filing. Neither Aung Hlaing Oo nor his
company responded to requests for comment.
Tun Hlaing,
director of the Myanmar Directorate for Defense Industries, has been linked to
several Singapore companies. His daughter Thet Hnin married Tay Za’s son Pye
Phyo in 2020. The wedding was held in a resort town near Mandalay, and the
groom arrived in a red Ferrari F8 Spider.
Tay Za, wearing
a black blazer and matching beret, can be seen in a lavishly produced video
posted on YouTube crying during the ceremony before playing on a drum set at
the dinner reception held in a glass conservatory lit by hundreds of bulbs.
Thet Hnin Hlaing
is involved in her father’s business and was a director of two of his Singapore
companies, registry filings show. Her father is also a shareholder in a
Singapore restaurant business, Vino Vovo Pte, which reported revenue of S$2.93
million in the fiscal year ended November 2019. Tun Hlaing didn’t respond to
requests for comment.
“Singapore
remains the business hub for military-linked companies,” said Yadanar Maung, a
spokesperson for Justice for Myanmar. The organization said it welcomes more
vigilance by Singapore banks and the stock exchange regulator, which suspended
trading in Emerging Towns & Cities Singapore Ltd. after the group published
information about that company’s links to the junta.
“But more needs
to be done,” she said, “including targeted sanctions against military
businesses, and an arms embargo that will stop Singapore-registered companies
procuring weapons and dual-use goods for the Myanmar military.”
Shrinking empire
Tay Za’s Htoo
Group has shrunk to about 15,000 employees, according to Pye Phyo, down from
the 60,000 reported by the Financial Times in 2011. Corresponding banking
relationships for his Asia Green Development Bank Ltd. have been terminated,
said his son Htoo Htet, who declined to identify those former counterparties.
Gone too is the credit-card business, as Visa Inc. and Mastercard Inc., both US
firms, can no longer do business with the bank.
Tay Za can’t start a process for removal from the
sanctions list because of “the current security situation as well as financial
constraints,” the company representative said. In an earlier attempt in 2014 to
lift sanctions, Tay Za engaged the law firm founded by John Ashcroft, a former
US attorney general under George W. Bush. The firm would have been paid between
$500,000 and $1 million, depending on how quickly it got results, according to
a copy of a previously unreported contract seen by Bloomberg News.
Tay Za’s former
wife was removed from the US list in 2015 on grounds of their separation.
President Barack Obama lifted sanctions against Myanmar and Tay Za the
following year. The representative for his company declined to disclose what if
any fees were paid to Ashcroft’s firm. Neither Ashcroft not his firm responded
to requests for comment.
The removal of
sanctions led to a flood of foreign investment. That year, Myanmar’s economy
was among the fastest growing in the world at 10.5%. But conflicts erupted with
ethnic groups seeking independence, and in 2017 the armed forces responded to
an attack by a militant Rohingya group that resulted in what the UN called
“ethnic cleansing.”
The sanctions
imposed after the 2021 coup have pushed the junta closer to Russia and China.
New arms dealers have emerged, including Kyaw Min Oo, 40, who used to work for
Tay Za, according to a person with direct knowledge of the matter.
Now managing
director of Yangon-based Sky Aviator Co., he registered at least five companies
in Singapore from 2015 through 2017 but stepped down from all of them in April,
after Justice for Myanmar published an August 2019 letter he wrote to the
Myanmar air force saying Sky Aviator is the “exclusive local representation” of
Russian Helicopters. In June, the UK added Sky Aviator to its sanctions list.
Sky Aviator and Russian Helicopters didn’t respond to requests for comment.
Chollet, the US
State Department official, says Singapore has been a good partner in helping
isolate Myanmar’s military regime. But Hunter Marston, an adjunct research
fellow at La Trobe University in Melbourne who has followed developments in
Southeast Asia since 2007, takes a dimmer view.
“Sanctions have
never worked in Myanmar, or arguably anywhere else,” Marston said. “They have
almost always hurt the people of Myanmar, while the generals have found ways to
park the money overseas and distribute the spoils of wealth to their own
loyalists within the country. The regime will not cave due to sanctions.”
 |
| Singapore's Santosa Island where Tay Za has a 3-storied mansion. |