Singapore firm taking Myanmar military conglomerate to court

After Japanese firm Kirin (see this week’s article), Singaporean firm RMHS said it plans to sue Myanmar military conglomerate Myanma Economic Holdings Public Limited (MEHL) over its “oppressive” behavior, alleging that it has ignored appeals for greater transparency and accountability over their joint venture.

RMH Singapore (RMHS) owns 49 per cent of Virginia Tobacco Company Limited (VTCL), the biggest cigarette maker in Myanmar, which employs about 1000 people. The rest of the company is owned by MEHL, a holding company owned by the military with interests in the mining, manufacturing, banking and tourism industries, among others.

In a media statement last week, RMHS said it was seeking relief from the Myanmar courts to protect its and VTCL’s interests. RMHS said it has been calling for changes to the cigarette company’s distribution system to comply with local laws. It also “urged greater transparency and accountability in payments made by VTCL, especially monthly donations requested by MEHL”. But the requests have been ignored, said RMHS, adding that it “has also been and continues to be subject to unfair and oppressive treatment by MEHL through threats and unreasonable conduct that is directed not only at RMHS but also adversely affects VTCL, including cutting staff welfare and withholding of staff benefits”.

In an exclusive interview with the Straits Times of Singapore, RMHS’ director Mr George Yin Soon said: “We are a Singapore-based company. We need to be transparent. We have other businesses and we don’t want to be linked to these allegations that we are not doing the right thing, especially on the human rights issue. (…) MEHL’s actions have destroyed the substratum of the joint venture” which began in 1993. “We believe in the Myanmar legal system so we are proceeding to the Myanmar court. We want to be treated fairly as an investor” he added.

Activists group said it was “the right move” and may push MEHL towards greater transparency though a lot more needed to be done until the company is put under civilian ownership.

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