Myanmar: Myanmar Brewery reports $155.9 mln Q2 revenue amid ongoing human rights investigation

Two months after the Japanese beer giant Kirin announced it was considering cutting ties with its military-conglomerate partner, a brewery the two jointly own announced $155.9 mln (212 bln kyat) in second-quarter revenue, Myanmar-now reported.

The military-owned Myanmar Economic Holdings Limited (MEHL) owns 49% of the Myanmar Brewery, maker of Myanmar Beer, and Kirin owns the remaining 51%. Together, the companies – which also jointly own Mandalay Brewery – produce about 80% of the beer sold in Myanmar.

Earlier this year, Kirin announced it had hired independent investigators to determine if MEHL’s profits help fund what many have called grave human rights abuses by the Myanmar military.

A 2019 UN fact-finding mission on the military’s economic interests found that profits made by MEHL help fund what it labelled international war crimes and crimes against humanity committed by the military, possibly including genocide. The military denies these allegations.

MEHL is headed by Tatmadaw commander-in-chief Min Aung Hlaing, who the UN mission recommended be tried for genocide for his leadership of what it called a campaign of mass murder, rape and arson against the Rohingya in Rakhine state in August 2017.

Myanmar is currently being tried on charges of genocide brought by Gambia at the International Court of Justice over the campaign.

Kirin representatives declined to comment while the company’s investigation is ongoing, but said the Covid-19 pandemic has slowed the process down some.

That didn’t stop its earnings report from prompting a new round of condemnation from human rights groups.

“August 25 marked the third anniversary of the Myanmar military’s campaign of genocide against the Rohingya,” rights group Justice for Myanmar noted. It’s joint venture with Kirin “has enabled the military to continue to commit international human rights crimes against ethnic communities” throughout Myanmar, it added.

“These profits are paying for violations of international law,” said Mark Farmaner, director of Burma Campaign UK.

Kirin has repeatedly said it takes the allegations from the UN mission – and human rights groups more generally – “very seriously,” and that it is committed to “identifying, preventing and mitigating” any human rights violations its businesses in Myanmar can.

Rights groups were again outraged on Monday when president U Win Myint awarded MEHL and the Myanmar Brewery with separate “outstanding taxpayer” awards.

MEHL is a massive conglomerate that controls large sector’s of Myanmar’s economy, including precious stone mining, timber, imports and exports and tobacco. In 2016, immediately before the National League for Democracy (NLD) took power, it changed its shareholder structure to divert revenue from the national budget into private hands.

Previously, shareholders were divided into two groups. Type A Shares were for the governmental defence ministry and type B for individual military units and organisations run by retired officers and servicemen and active and former military personnel. Weeks before the NLD government was inaugurated, MEHL converted all type A shares into type B – moving most of the company’s profits from the national budget into the pockets of individual military men, save for those it paid in taxes.

“The military cartel’s tax contributions are insignificant compared to their massive profits and accumulated assets, stolen from the people of Myanmar,” Justice for Myanmar said in a Facebook post Tuesday, adding that the awards demonstrate “the monopolistic hold the military continues to have on the Myanmar economy, despite a near full-term of National League for Democracy-led government.”

“The Myanmar military has used taxpaying as a way of legitimising their cartel, by claiming that they are contributing to the national economy, when in fact they are impoverishing the country,” it added.

Military and MEHL representatives could not be reached for comment.

In June, after MEHL ignored document requests from a Kirin due diligence effort, the Japanese company hired financial consultancy Deloitte “to determine the destination of proceeds” from the Myanmar Brewery.

It added that it was “exploring alternative structural options for the ownership of the Myanmar joint-ventures,” but representatives declined to provide further details on what that might mean.

“The Deloitte investigation appears to be a desperate attempt by Kirin to find some technicality it can use to stay in business with the military,” Farmaner said, after the earnings report was released.

Finding certain financial and stakeholder information on MEHL should not be as hard as it has been for active or potential partners and the media. As a public company with more than 100 shareholders, it is required under Myanmar’s Securities and Exchange Law to publish regular financial statements and information on its major shareholders to its website, but it has never done so.

Under the Myanmar Companies Law it must also file financial statements with the Directorate of Investment and Company Administration (DICA) – a filing that automatically puts those statements in the public domain, according to Vicky Bowman, director of the Myanmar Centre for Responsible Business (MCRB).

The company has filed regular statements to DICA but these documents still remain inaccessible to journalists and to the public.

On June 3 the company filed a notice with DICA to alter its constitution. This filing is also supposed to be made public, though it has not been.

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