Myanmar Agro Exchange (MAEX), the developer of Yangon’s Danyingone Wholesale Market, became the eighth company to list on the Yangon Stock Exchange (YSX) when it began trading today.
The first stage of the Danyingone Wholesale Market, which is being built in four stages and is scheduled for completion in 2027, opened in 2018. The YSX listing will help raise funds for the remaining stages, as well as possible investments in markets nationwide, according to company disclosures.
MAEX was formed in 2015 under a plan of the former Union Solidarity and Development Party government as a public-private partnership involving the Yangon Region government and the city’s administration, the Yangon City Development Committee (YCDC). Dagon International won the tender and signed a development agreement with the YCDC weeks before the handover of power to the National League for Democracy.
Through the February 2021 coup, the Myanmar military took over the YCDC and stands to benefit from the new listing.
Under the development agreement, 25% of MAEX’s profits flow to the YCDC. According to MAEX’s disclosure document for listing, the YCDC also has the right to a seat on the MAEX board and has appointed a retired army major who is deputy head of the YCDC markets department. Within the Danyingone market, YCDC also gets control of 20% of the shophouses.
In the year to September 30, 2022, YCDC received 953m kyat (US$454,000) in profits from MAEX, the company’s financial statements show.
Twenty acres of the 80-acre development site are still being held by the “Myanmar Government,” according to disclosures, and MAEX and YCDC are renegotiating for the transfer of that land.
Since the military’s coup attempt, YCDC has been involved in the confiscation of land in Yangon and the destruction of settlements and shops.
Dagon Group and MAEX
MAEX is controlled by Dagon Group chairperson Win Aung and his family through shares held by Dagon Group, the linked company Golden Land East Asia Limited, and family members. Win Aung serves as chairperson of the MAEX board, alongside his son Thurane Aung, Thurane Aung’s father-in-law, Sit Lwin, and Thurane Aung’s brother-in-law, Phone Phone Naing.
Dr Zaw Oo, who was an advisor to the military’s former proxy president Thein Sein, also sits on the MAEX board.
Win Aung and his family have benefited from close links to the Myanmar military. A US embassy cable leaked by Wikileaks revealed lucrative contracts for the construction of Naypyitaw and profits from illegal teak exports under the Than Shwe regime. Win Aung used to be sanctioned by the US and EU.
Win Aung’s ongoing links to the junta include investments in Mytel through Golden Land East Asia Limited and Myanmar Agribusiness Public Company Limited, and more recently, a donation he made to Min Aung Hlaing in support of a giant Buddha statue.
Criticism of YSX
The activist group Justice For Myanmar criticised YSX investors for listing a company that is linked to the YCDC while the city administration remains under junta control.
YSX is a joint venture between Japan Exchange Group, Daiwa Institute of Research, and the junta-controlled Myanma Economic Bank.
Justice For Myanmar spokesperson Yadanar Maung told Myanmar Now, “YSX’s Japanese shareholders are helping to normalise and entrench crony capitalism in Myanmar and facilitate fundraising for a crony company that is sharing its profits with the illegal military junta.”
“The involvement of YCDC in MAEX and the fact that the company is illegally negotiating for a land concession with the junta, which is not the government of Myanmar, should have prevented this listing from being approved,” she added.
Myanmar Now reached out to MAEX and Daiwa Institute for comment, but still had not received any response at the time of publication.
This is not the first time a YSX listing has been called out for its military links. In 2020, Ever Flow River listed on the YSX to raise funds for an inland port being developed with the military conglomerate Myanma Economic Holdings Limited (MEHL).
The port development exposed an illegal conflict of interest as the heads of the Myanma Port Authority and the Customs Department sat on the board of MEHL and stood to financially benefit from the project.