Telenor sale to military-linked consortium to be complete in mid-February

Telenor’s sale of its Myanmar subsidiary will be completed by February 15, according to a source with knowledge of the deal.

The company will be majority-owned by the military-linked gems and petrol conglomerate, Shwe Byain Phyu. 

According to the source, two members of the military council are involved with Shwe Byain Phyu and will benefit from the sale, although Myanmar Now could not independently verify this.

When asked to comment on the involvement of the junta members in the deal, Telenor Group communications director Cathrine Stang Lund replied that, “We are not commenting on speculations in the market.”

Internal documents seen by Myanmar Now from the junta’s Post and Telecommunications Department under the Ministry of Transport and Communications indicate that the buyer will be Investcom Myanmar, a company that has not yet been registered. 

The document stated that Shwe Byain Phyu will be the majority owner of Investcom Myanmar. The source told Myanmar Now that Shwe Byain Phyu will own 70 to 80 percent of the company. 

Telenor, a leading telecommunications operator in Myanmar serving more than 18 million users, announced in early July it was selling its Myanmar unit to M1 Group for US$105m. 

The junta “privately” approved the sale of Telenor’s operation in Myanmar to M1 Group and Shwe Byain Phyu last month after several months of stalling the process, Reuters reported on January 21.

Shwe Byain Phyu has no known experience operating a telecommunications business. 

There is concern that if the sale is completed, the military junta will potentially be able to access the historical call data of Telenor’s 18 million users. 

Who owns Investcom?

Myanmar Now could not find a record of Investcom on Myanmar’s company registry, however a company named Investcom Pte Ltd was incorporated in Singapore on July 29 last year, three weeks after Telenor Group’s sales announcement.

Directors include Azmi Mikati, the CEO of M1 Group, and Jamal Ramadan, the CEO of M1 Enterprises. 

Azmi Mikati is the nephew of the current Lebanese Prime Minister, Najib Mikati.

Initially, shares in Investcom’s Singapore business were held by M1 Infrastructure, a shell company registered in the Cayman Islands, a known offshore tax haven.

However, on January 20, some 49 percent of the shares in Investcom Pte Ltd were transferred to Shwe Byain Phyu Telecom Co Ltd, according to company data, with the remaining 51 percent held by the Cayman Islands-registered business. 

Shwe Byain Phyu Telecom is a registered company in Myanmar. It was previously registered as Shwe Byain Phyu Manufacturing Co Ltd and only changed its name on November 3, 2021. Despite gaining 49 percent of the Investcom Pte Ltd, Shwe Byain Phyu did not appoint a director.

The involvement of a Cayman Islands shell company conceals the ownership of the buyers of Telenor Myanmar and raises transparency concerns. 

The non-profit Tax Justice Network ranks the Cayman Islands first in its Financial Secrecy Index and second in its index of corporate tax havens. 

Myanmar DICA’s record on Shwe Byain Phyu Telecom Co., Ltd

Myanmar Now asked Telenor to disclose the beneficial owners of Investcom Myanmar, as well as to provide clarity on which legal entity Telenor is selling their Myanmar company to, and whether they are concerned about the involvement of a company registered in the Cayman Islands. 

“Telenor is waiting for regulatory approval of the sale of Telenor Myanmar to M1 Group,” Telenor communications director Cathrine Stang Lund said.

Established in 1982 by M1 Group’s owners, Investcom is also the name of M1’s telecommunications business which was sold to the South African telecoms firm MTN in 2006 for $5.5b.

M1 has a controversial history of business with brutal regimes and its investment in Myanmar’s military-linked telecoms tower company Irrawaddy Green Towers.

Shwe Byain Phyu, serving the generals

Established in 2000, Shwe Byain Phyu is a group of companies with interests in gem mining, petrol, logistics, and manufacturing. With nine subsidiaries under the group, it has a long history of serving the military-owned Myanma Economic Holdings Limited (MEHL), better known as U Paing in Burmese, since the 2000s. 

The company lists the Naypyitaw gems and jewellery market as its principal place of business. 

According to a previously published interview with its chairman in FWP Research—a Japanese-affiliated research firm in Myanmar—Shwe Byain Phyu imported petroleum under the name of MEHL at that time. The agreement was that the profits would be shared between both parties, the report said. 

The Shwe Byain Phyu Group is owned and founded by 59-year-old Thein Win Zaw. He established a company called Manaw Thidar in 1996 under the rule of former dictator Than Shwe which later became a subsidiary under Shwe Byain Phyu. Corporate data shows that Thein Win Zaw is also a director of Mahar Yoma Public Company, part of a consortium that also has a stake in the military-owned telecoms operator Mytel.

Thein Win Zaw, founder and chair of the Shwe Byain Phyu Group of Companies (FRW Research)

His wife, Tin Latt Min, sits on the group’s management board as a managing director. She is also a shareholder of the Forest Product Joint Venture Corporation, which has been sanctioned by the European Union. 

Thein Win Zaw and his family also hold 7 percent of the stakes in the Global Treasure Bank, out of nearly 1,000 shareholders. He has a strong relationship with the Ministry of Agriculture, Livestock and Irrigation and was granted multiple project contracts during the ministry’s push towards privatisation during ex-President Thein Sein’s administration. 

Civil society pressure

At a time when civil society groups have been urging the Norwegian government and Telenor Group to carry out a responsible and ethical exit from Myanmar, the junta’s approval of the sale to the partnership between M1 and the military-linked Shwe Byain Phyu is likely to attract even further criticism concerning Telenor’s departure. 

Advocacy group Justice For Myanmar’s (JFM) spokesperson Yadanar Maung said that Telenor’s sale amounts to a serious violation of the privacy rights of millions of people in the country and will put lives at risk. She called on the Norwegian government to “urgently intervene” in the sales process to prevent “grave human rights violations.”

“Telenor must explain to the people of Myanmar who the beneficial owners of this deal are and ensure that the personal data of 18 million people is not handed to the terrorist Myanmar military junta,” she told Myanmar Now on Friday.

In attempts to quell protests and armed resistance, the junta has carried out arbitrary arrests and mass killings of civilians, at times burning the bodies of its victims as well as entire villages suspected of providing support to the guerrilla forces.  

The Myanmar military junta has killed 1,513 people since staging a coup on February 1 last year and is still detaining nearly 9,000 prisoners across the country, according to figures from the Assistance Association for Political Prisoners.

Following the Telenor Group’s divestment announcement last year, 464 civil society organisations sent an open letter to the Norwegian government demanding a halt to the sale; Norway’s minister for trade and industry Iselin Nybø responded that Telenor’s investment and operations were the responsibility of the company’s board. 

Later that month, hundreds of Myanmar civil society organisations filed a formal complaint with the Organisation for Economic Co-operation and Development (OECD), accusing Norwegian telecoms giant Telenor of “irresponsible disengagement” from the country.

On January 30, on behalf of the 168 civil society organisations in Myanmar, the Norwegian Forum for Development and Environment sent a letter to the Norwegian prime minister demanding a stop to the sale of Telenor Myanmar to M1 Group and Shwe Byain Phyu, which would expose the data of more than 18 million users.

“Metadata is sensitive data that can be used in warfare to wind up networks, make arrests and potentially target people for assault, detention, ill-treatment, and execution for simply fighting for freedom and basic human rights,” the letter said.

It added that the sale is “incompatible with both Norway’s understanding of human rights and stands in contrast to Norway’s stance on the issue under its current membership in the UN Security Council.” 

The civil society organisations also urged the Norwegian government to prove that the country “does not only talk the talk, but also walks the walk on human rights issues.”

Telenor Group earned 4.055b Norwegian kroner ($463.95m) from its Myanmar unit in 2020, which accounted for more than 7 percent of Telenor’s earnings that year, according to the group’s annual report.

The involvement of military council members in the sale creates a risk that future profits could flow to the junta.

The Myanmar military’s spokesperson did not answer calls seeking comment on the two military council members’ involvement in the sale of Telenor Myanmar. 

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