The US goes after a shady Burmese “businessman” and turns up the heat on his Singapore links also.

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. And, 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. The story of the connection between the Singapore Government and the Lo and Law family was first reported by Australia's SBS Dateline in a report called "Singapore Sling."  In a 1997 article, the US magazine The Nation  also described the 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).

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 one of two main contractors for the construction of the new capitol at Naypyidaw.  In 2001 the company’s authorized capitol was given at about US$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 which have had their assets frozen and were denied travel to the US.  This is the latest in an ongoing series of financial sanctions aimed at hurting Burma’s ruling State Peace and Development Council 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 Asia World.

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, and that 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 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 massive amount of the 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 joint venture was with Sinmardev International Pte Ltd of Singapore.  Headed by Albert Hong, Sinmardev was a consortium of Singaporean and other companies that built 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.”

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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Singapore and Burma: Such Good Friends
Eric Ellis
10 October 2007

The city-state’s diplomats may denounce the current crackdown, but Singapore is a crucial ally for the junta’s brutal generals.

When protesters dared to show up in Singapore’s Istana Park earlier this week to protest Burma’s crackdown, authorities promptly arrested them, a reminder that Singapore isn’t just skilled at mandatory executions of drug traffickers, running an excellent airport and selling cameras to tourists. It also does a very useful trade keeping Burma’s military rulers and their cronies afloat. The five, members of the Singapore Democratic Party, were arrested, police said, for staging an unlawful demonstration. Singapore and Burmese nationals, the police said, have been allowed to protest “in a lawful manner,” along with some expatriate women wearing red.

For all the attention placed on China and its upcoming hosting of the Olympic Games as a diplomatic pressure point on the Burmese junta, which hove back into the world’s view by violently squashed non-violent demonstrators led by Buddhist monks all across Burma. Government business-technocrats in Singapore were also closely – and perhaps nervously — monitoring the brutality underway in Rangoon. And, were they so inclined, their influence could go a long way to limiting the misery being inflicted on Burma’s 54 million people.

Collectively known as “Singapore Inc,” they tend to gather around the $150 billion state-owned investment house Temasek Holdings, controlled by a member of Singapore’s long-ruling Lee family, Ho Ching, the wife of Prime Minister Lee Hsien Loong. Singapore companies have been some of the biggest investors in and supporters of Burma’s military junta, while its government, in the rare times it is asked, suggests a softly-softly diplomatic approach toward the junta. Tiny Singapore ranks alongside China and Thailand as Burma’s biggest trading partners.

When it comes to Burma, Singapore pockets the high morals it likes to wave at the West elsewhere. Singapore’s one-time head of foreign trade once said as his country was building links with Burma in the mid 1990’s; “while the other countries are ignoring it, it's a good time for us to go in….you get better deals, and you're more appreciated... Singapore's position is not to judge them and take a judgmental moral high ground.”

But by providing Burma’s pariah junta much of the crucial materiel and equipment denied by Western sanctions, Singapore has helped keep the junta and its cronies afloat for 20 years, indeed since the last time the generals opened fire on the citizens they are supposed to protect. Withdraw that financial support from Singapore and others and Burma’s junta would be substantially weakened, perhaps even fail. But after two decades of profitable business with the trigger-happy generals, that’s about the last thing Singapore is likely to do. There’s too much money to be made.

While the world’s attention — and outrage — was riveted on Rangoon in late September, Singapore was at pains to be seen as the region’s leading voice in condemning the junta. Chairing ASEAN, it articulated the grouping’s “revulsion” toward Burma at the United Nations. The quasi-official Straits Times loyally parroted the line while overlooking the intimate business links Singapore has cultivated there, the medical care and hyper-security junta leaders get from Singapore and the frequent state visits.

Singapore’s spin was no better articulated internationally than by Tom Plate of the UCLA’s Asia-Pacific Media Network, a man regarded in Singapore as a particular favorite. In a column for CNN, Plate opined that (Foreign Minister George) Yeo “has few equals on the world diplomatic stage in the department of clear, concise and unmistakable language. Words like ‘appalled’ and we ‘demand’ are rarities in ASEAN-speak. Yeo used them — and a few other choice ones as well … Also working behind the scenes was Singapore's prime minister   Lee Hsien Loong. He was lobbying his often-timid counterparts among the ASEAN states not to wimp out at the very moment the eyes of the entire world were glued on messed-up Buddhist Burma in Southeast Asia. Nobody has ever said Singapore was dumb.”

Perhaps, but no one ever said Singapore wasn’t pragmatic either, and nowhere did Plate link Singapore’s corporate endeavors in Burma to the current appalling mess. No sooner had the junta’s guns prevailed and world attention diverted, Singapore retreated to its self-interested status quo of doing little beyond occasional diplomatic hand-wringing. While Malaysia stated the obvious – that ASEAN’s policy toward Rangoon had failed   and capitals across the region summoned envoys, kept up pressure and allowed spontaneous popular protests outside Burma’s ASEAN embassies, Singapore quietly balked. In New York, Singapore's UN ambassador Vanu Gopala Menon told the Security Council that if sanctions were adopted against Burma, "we have to pause to consider dispassionately what the real impact of additional sanctions will be."

So much of Burma’s bucks start with Singapore. Hotels, airlines, military equipment and training, crowd control equipment and sophisticated monitoring devices for its secret police, Singapore is a crucial manager and supplier to the junta, and the economy it controls. It is impossible to spend any meaningful time in Burma, and not make the junta richer, often via contracts with Singaporean suppliers to the tourism industry. Singapore’s hospitals also keep its leaders alive – 74 year-old junta strongman Than Shwe has been getting his intestinal cancer treated in a Singapore government hospital, in a ward heavily protected by Singaporean security. Singapore’s boutiques keep junta wives and families cloaked in Armani, and its banks help launder their money.

Much of Singapore’s activity in Burma has been documented by an analyst working in Australia’s Office of National Assessments, Canberra’s premier intelligence agency. Andrew Selth is recognized as one of the world’s leading authorities on the Burmese military. Now a research fellow at Queensland’s Griffith University, Selth has written extensively on how close Singapore is to the junta. Often writing as “William Ashton” in the authoritative Jane’s Intelligence Review, Selth has described in various articles how Singapore has sent the junta guns, rockets, armored personnel carriers and grenade launchers, some of it trans-shipped from stocks seized by Israel from Palestinians in southern Lebanon. Singaporean companies have provided computers and networking equipment for Burma's defense ministry and army, while upgrading the junta’s ability to network with regional commanders, crucial when protests spread, as they did recently, nationwide causing major logistical headaches for the Tatmadaw, Burma’s military.

“Singapore cares little about human rights, in particular the plight of the ethnic and religious minorities in Burma,” Selth writes. “Having developed one of the region’s most advanced armed forces and defense industrial support bases, Singapore is in a good position to offer Burma a number of inducements which other ASEAN countries would find hard to match.”

Selth says Singapore also provided the equipment for a “cyber war center” to monitor dissident activity while training Burma’s secret police, whose sole job it seems is to ensure pro-democracy groups are crushed. Monitoring dissidents is an area where Singapore has particular expertise.  “This centre is reported to be closely involved in the monitoring and recording of foreign and domestic telecommunications, including the satellite telephone conversations of Burmese opposition groups.” Selth writes.

Singapore government companies, like leading arms supplier Singapore Technologies, dominate the communications and military sector in Singapore. Duly, Selth writes “it is highly unlikely that any of these arms shipments to Burma could have been made without the knowledge and support of the Singapore Government.” He notes that Singapore’s ambassadors to Burma have included a former senior Singapore Armed Forces officer, and a past director of Singapore's defense-oriented Joint Intelligence Directorate. “It is curious that Singapore chose to assign someone with a military background to this new member of the Association of South East Asian Nations (ASEAN) and not one of its many capable professional diplomats.” He writes that after the 1988 crackdown, when the junta killed some 3,000 democracy protesters, “The first country to come to the regime’s rescue was in fact Singapore.”

When I interviewed Singapore Technologies CEO Peter Seah at his office in Singapore, I inquired after the scale model of an armored personnel carrier made by his company that sat on his office table. He said ST sold the vehicles “only to allies.” Does that include Burma, I asked, given that Singapore helped sponsor the military regime’s entry into ASEAN? Seah was non-specific. “We only sell to allies and we make sure they are responsible.” He didn’t say how. For their part, ST and Temasek don’t respond to questions about their activities in Burma.

Singapore is so close to Burma than one of its diplomats there wrote a handbook for its businesspeople there. Matthew Sim’s “Myanmar on My Mind” is full of useful tips for doing business in Burma, including being realistic about corruption and lawbreakers, despite Singapore’s self-proclaimed clean image. “A little money goes a long way in greasing the wheels of productivity,” he writes.

A chapter headed “Committing Manslaughter When Driving” describes the appropriate action if a Singaporean businessman accidentally kills a Burmese pedestrian. “Firstly, the international businessman could give the family of the deceased some money as compensation and dissuade them from pressing charges. Secondly, he could pay a Myanmar citizen to take the blame by declaring that he was the driver in the fatal accident. An international businessman should not make the mistake of trying to argue his case in a court of law when it comes to a fatal accident, even if he is in the right. He highly probably will spend time in jail regretting it. It is a sad and hard world. The facts of life can be ugly.”

Sim describes Singapore’s usefulness to Burma. “Many successful Myanmar businessmen have opened shell companies” in Singapore “with little or no staff, used to keep funds overseas,” he notes. Sim says the companies are used to keep business deals outside the control of Burma’s central bank, enabling Singaporeans and others to do business with Burma in Singapore.

He may be referring to junta cronies like Tay Za and the druglord Lo Hsing Han. Lo is an ethnic Chinese, from Burma’s traditionally Chinese-populated and opium-rich Kokang region in the country’s east, bordering China. Lo controls a massive heroin empire, and one of Burma’s biggest companies, Asia World, which the US Drug Enforcement Agency describes as a front for his drug-trafficking. Asia World controls toll roads, industrial parks and trading companies. Singapore is the Lo family’s crucial window to the world, controlling a number of companies there. His son Steven, who has been denied a visa to the US because of his links to the drug trade, even married a Singaporean, Cecilia Ng, and the two reportedly control a Singapore-based trading house, Kokang Singapore Pte Ltd. The couple transit Singapore at will. A former US Assistant Secretary of State for the Bureau of International Narcotics and Law Enforcement Affairs, Robert Gelbard, has said that half of Singapore’s investments in Burma “have been tied to the family of narco-trafficker Lo Hsing Han.”

Romantically-linked to a daughter of junta leader Than Shwe, Tay Za is also well known in Singapore. He had his fleet of Ferraris, Lexus’ and Mercedes shipped in from there. When on the island, he likes to stay at the Meritus Mandarin hotel on Orchard Rd, close to the excellent Singapore hospitals favored by his senior military patrons in Burma. Tay Za was all over the Singapore media last year toasting the launch of his new airline, Air Bagan, with the head of Singapore’s aviation authority. Dissident groups say the trade-off for Tay Za’s government business contracts in Burma is to fund junta leaders’ medical trips to Singapore.

POST-SCRIPT:
When an earlier version of the article above was published last week in the Sydney Morning Herald, Singapore's High Commissioner to Canberra, Eddie Teo, a former boss of Singapore's secret police, the ISD, wrote to the newspaper to deny that Singapore had provided Burma's generals with succor and support. It may be that these remarks are re-visited when what Lee Kuan Yew describes as the "ticking time bomb" of the Burmese junta explodes, as many Burmese and foreign diplomats believe is likely.

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