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A
big-time Burmese drug trafficker's Singaporean connection
Brian
McCartan
Asia Sentinel
1 March
08
http://www.asiasentinel.com/index.php?option=com...
In
an action that Burma watchers view as long overdue, the United
States earlier this week slapped financial sanctions on wealthy
Burmese businessman Lo Hsing Han, his US-educated son, Steven Law
and Law's wife, Cecilia Ng, a Singaporean businesswoman.
At
least 10 Singaporean companies owned by Law's wife have been
targeted by the sanctions. Among other things, the sanctions
point up the often-unhealthy way the Singaporean government
chooses to ignore relationships between its financial community
and unsavory Burmese businessmen. Because of the ties to Lo's
main corporate vehicle, Asia World Co. Ltd, the story also
illustrates graphically the narco-state that Burma's rulers have
visited upon the world stage.
Asia World is targeted by
sanctions also. Included among the Singaporean companies owned by
Ng is Golden Aaron Pte Ltd, which has been linked to the Chinese
state-controlled oil and gas giant, China National Offshore Oil
Corporation (CNOOC). Under the sanctions, any bank accounts and
financial assets the individuals or their companies hold in the
United States are frozen and Americans are forbidden from doing
business with them.
Asia World is considered to be
Burma's biggest and most diversified conglomerate. Lo is chairman
and Steven Law is the company's managing director. In a 1997
article, The Nation, a US magazine, described a web of
connections between Asia World and the Singapore government,
which "is directly connected to key business ventures of
drug kingpin Lo" through a series of investments in the
Myanmar Fund, including some by the Government of Singapore
Investment Corporation (GIC). It is not known if the investments
continue. GIC, a sovereign wealth firm, jealously guards the
identity of its investments.
In a letter to the magazine
the Singapore embassy in the US said that GIC was a passive
investor in the Myanmar Fund and was not involved in investment
decisions and that the Myanmar Fund had been wound up.
Asia
World is involved in industrial investment, development,
construction and transportation. It imports and distributes goods
into Burma and owns a supermarket chain. It was recently
involved in road construction from Pyin Oo Lwin in Shan State to
the Chinese border, the renovation of Rangoon's international
airport and the construction of a deep water seaport at Ahlone
near Rangoon. It was also on of two main contractors for the
construction of the new capitol at Naypyidaw. In 2001 the
company's authorized capitol was given at about $40 million.
Rangoon's port, which handles 40 percent of Burma's
container traffic, is also run by Asia World which also operates
a cargo and shipping business from the port. This and Lo's
ownership of Burma's largest bus company has led some to
speculate about whether he is using the facilities for continued
drug trafficking.
Lo and Steven Law were refused visas to
travel to the US as long ago as 1996 for suspected drug
trafficking activities. The property interests of Golden Aaron
are now reportedly blocked.
These moves follow sanctions
earlier this month against the business empire of Burmese tycoon
Tay Za and 33 other Burmese generals and business people and 11
companies who have had their assets frozen and were denied travel
to the United States. This is the latest in an ongoing series of
financial sanctions aimed at hurting Burma's ruling State Peace
and Development through its business contacts.
"Unless
the ruling junta in Burma halts the violent suppression of its
peoples, we will continue to target those like Steven Law who
sustain and who profit corruptly because of that support,"
said Stuart Levy, Treasury Department Under-Secretary for
Terrorism and Financial Intelligence.
According to the
Treasury Department, "In addition to their support for the
Burmese regime, Steven Law and Lo Hsing Han have a history of
involvement in illicit activities. Lo, known as the 'Godfather of
Heroin,' has been one of the world's key heroin traffickers
dating back to the early 1970s. Law joined his father's drug
empire in the 1990s and has since become one of the wealthiest
individuals in Burma."
The saga of how Lo and his
son acquired their fortune and the outward trappings of
respectability has many twists and turns including several
brushes with death. Lo, 70 or 73 years old depending on the
source, began in the drug trade in 1960 when he organized a local
militia in the Kokang area of Shan State. The government turned a
blind eye to Lo's drug trafficking in exchange for his assistance
in fighting Shan insurgents. He was dubbed the "King of
Opium" by US authorities in the 1970s.
His fortunes
then changed. Thai police arrested Lo in 1973 and deported him
back to Burma, where he was found guilty of rebellion and
sentenced to death. However, he was given amnesty in 1980, and he
moved back to Shan State where he built his headquarters at
Salween Village near Nampawng southwest of Lashio. He immediately
reestablished himself with a new militia and resumed his role in
the drug trade.
The wisdom behind granting Lo amnesty was
borne out when Lt General Khin Nyunt used him as a go-between in
1989 in arranging ceasefires with Kokang and Wa insurgents who
had recently mutinied against their Burmese Communist Party
leaders. In exchange, according to a memo from the Thai Office of
Narcotics Control Board in 1993, Khin Nyunt gave Lo the right "to
smuggle heroin from the Kokang Group to Tachilek [on the border
with Thailand] without interception." By 1994 he controlled
what was regarded as the most heavily armed drug trafficking
organization in Southeast Asia.
Lo also gained unfettered
access to the Burmese economy for his part in the ceasefire
deals. This was further enhanced when in the early 1990s, with
the Burmese economy on the brink of collapse, the generals turned
to traffickers to invest their money in legal and semi-legal
businesses. A "whitening" tax of 40 percent, later
reduced to 25 percent, was levied on funds repatriated from bank
accounts in Bangkok and Singapore. It was also at this time, on
June 5, 1992, that Lo set up the Asia World Company.
Law
enforcement officials say indications are that since the
mid-1990s Lo has stepped back from direct involvement in the drug
trade, although he does reportedly maintain contacts, although
this has not stopped western law enforcement agencies from trying
to find evidence of his continued role, so far without success.
Lo's business empire, international observers believe, is
built on the profits from his drug trafficking activities. These
businesses and his money have proved invaluable to the junta.
Lo
has maintained strong relations with Burma's ruling generals. At
Steven Law and Cecilia Ng's 1996 wedding, among the guests was
then-Hotels and Tourism Minister Lt General Kyaw Ba as well as
three other generals and four cabinet ministers. Lo also
organized the catering for the extravagant wedding party thrown
for the daughter of Burma's Senior General Than Shwe in 2006.
Despite Lo's relations with Khin Nyunt, he was notably unaffected
when the general was arrested and placed under house arrest in
2004.
Lo also has been described by government figures as
the most prominent partner for foreigners wishing to invest in
Burma, with a possible 15 percent of all joint venture investment
done through Asia World. For example, an agreement to import
cooking oil from companies controlled by Malaysian billionaire
Robert Kuok reportedly has grown into very lucrative real estate
and construction deals, including the construction of the
Trader's Hotel in Rangoon, in which Asia World holds shares.
Another very profitable joint venture is with Sinmardev
International Pte Ltd of Singapore. Headed by Albert Hong,
Sinmardev constructed and now operates a US$207 million
industrial park and port on the outskirts of Rangoon. Asia World
contracted for part of the construction and holds shares in the
project along with the members of the junta and several
international investors.
Steven Law, who also goes by Tun
Myint Naing, is the managing director of Golden Aaron, which has
now been linked to CNOOC. The link was spotted by David Webb, a
business commentator and non-executive director of the Hong Kong
Stock Exchange. The relationship goes back to an October 2004
production-sharing contract between Myanmar Oil and Gas
Enterprise and a business group formed by CNOOC Myanmar, Golden
Aaron and China Huanqui Contracting and Engineering Corp to
explore for oil and gas in Kyaukphyu township of Rakhine
State.
According to the official New Light of Myanmar
newspaper, the signing ceremony was attended by CNOOC chairman Fu
Chengyu and Golden Aaron director Chua Chay Jin.
CNOOC's
2004 annual report listed itself as the operator of a joint
venture with Golden Aaron and China Global Engineering Corp.
through which it owns five exploration licenses covering 73,152
square kilometers. The licenses will run out on March 12, 2008
unless they are renewed. The gas deposits are part of the
controversial Shwe gas project which is to include a gas pipeline
through Burma to China. Human rights organizations have
frequently cited abuses related to the project and have called
for its cancellation.
The US sanctions may also have an
effect on Singapore. The island republic has long been accused of
being a shopping and financial center for Burmese generals and
narcotics traffickers. Former US Assistant Secretary of State for
the Bureau of International Narcotics and Law Enforcement
Affairs, Robert Gelbard, said in 1997, "since 1998 over half
of [the investments from] Singapore have been tied to the family
of narco-trafficker Lo Hsing Han."
Singapore also
received much unwanted attention for its role in the Myanmar Fund
controlled by Lo through Asia World Company. The Singapore
Government Investment Corporation had invested in the fund in the
1990s. When the connection between Singapore government money and
drug traffickers was exposed in 1997, the government liquidated
their investment and the fund shut down in August
1997.
Singaporean banks have been repeatedly accused of
being used for money laundering by Burmese narcotics traffickers.
Although Singapore does have what are considered by the
Asia/Pacific Group on Money Laundering effective anti-money
laundering mechanisms, the fact that figures such as Lo and Law
are able to continue to do business there and keep banks accounts
has prompted much speculation. In a recent step to detect money
laundering, the Singaporean police announced that after 1
November 2007, anyone carrying or transferring more than $20,650
would be required to submit a report to the immigration
authorities.
Whether or not the money is from drug
profits, it is being used to finance investment in Burma that the
US and international observers claim prop up the regime. While US
financial sanctions are not aimed directly at Singapore or its
banks, the hint is there that by dealing with individuals and
firms on the sanctions list, the banks risk bad publicity.
Although
the Money Authority of Singapore is unlikely to advise banks to
cut ties with Burmese firms as a result of the US sanctions, some
analysts believe Singaporean banks are taking steps to restrict
their links to Burmese companies. The refusal of Singaporean
banks to deal with Burmese tycoon Tay Za's Air Bagan airline is
seen as a possible example of this. In addition, in late October
2007 the Irrawaddy magazine reported that bank transfers between
United Overseas Bank of Singapore and Burma had been suspended
temporarily. The risks to their banking relationships with the US
may be forcing Singaporean banks to re-evaluate doing business
with Burmese firms.
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