In a little-noticed move in September 2022, Myanmar’s military government shut public access to a key part of its online corporate registry to shield the shareholdings of the senior leadership and their families, and to safeguard the establishment of front companies created to evade international sanctions.

The Myanmar Companies Online (MyCO) fee-based platform was established with Japanese technical help in August 2018 in accordance with the country’s 2017 Law on Corporations, under the Ministry of Planning and Investment.

MyCO listed not just the publicly available corporate information for 120,000 firms, but also detailed personal information on both active and former directors and shareholders, including their ownership stakes, date of appointment, ID numbers, addresses and birth dates.

The public corporate information is still available but the detailed personal information no longer is, although a hacking collective, Distributed Denial of Secrets, has released the data through February 2021 in response to the military’s coup that month.

What is the State Administrative Council (SAC), as the junta is formally called, trying to hide?

The obvious first answer is the SAC’s self-enrichment. SAC members and their family-owned corporations have won many lucrative contracts in construction, solar power, electrification, road construction and cement.

At the time of the coup, there were some 27 known corporations owned by the children of senior military leaders, including members of the SAC. Of the 75 individuals that the US government has sanctioned since the 2021 coup d’état, 22 are the spouses or adult children of senior members of the SAC leadership. Four of the 25 US-sanctioned firms are owned by junta chief Min Aung Hlaing’s children.

The junta has been sensitive to reports about its own self-enrichment, including a January exposé on the assets and bank books of Min Aung Hlaing’s children that were found in the Bangkok apartment of a Burmese businessman who was arrested for money laundering and drug smuggling.

The generals are also fearful of being seen seizing the assets of supporters of the ousted National League for Democracy government and divvying up the corporate shares among themselves and their cronies.

The cash-strapped regime, which failed to quickly consolidate power and is mired in a multi-year, multi-front war, has seen foreign investment and development assistance to the country dry up.

Short on cash, it is starting to shed assets. The SAC established a “privatisation commission”, which by mid-2022 had put some 134 assets, including real estate and factories, up for tender.

The generals and their cronies are likely benefiting from fire-sale prices, while for foreign investors, there is an incentive to shield their actions due to reputational costs.

But the removal of the MyCO platform also helps with the establishment of front companies to evade international sanctions.

A 2019 UN Human Rights Council report identified 106 corporations owned by two military-owned conglomerates, Myanma Economic Holdings Ltd (MEHL) and Myanmar Economic Corporation (MEC). Justice for Myanmar, an advocacy group, has detailed 130 military-owned corporate holdings that fund the junta’s military operations.

The two conglomerates are involved in all sectors of the economy, including metals and mining, energy, transport, hotels and hospitality, telecommunications, consumer goods, banking and finance, food and beverage, and real estate.

The US government sanctioned MEHL and MEC and all their subsidiaries and joint ventures, including their two banks, on March 25, 2021.

The UK and EU sanctioned both conglomerates in March and April 2021, respectively.

The US has also sanctioned 21 other corporate entities that are either state-owned enterprises raising funds for the regime or corporations involved in the importation of weapons, spare parts or surveillance equipment. These corporations are vital to the regime both as a source of funding and of arms. Many are also under UK and EU sanctions.

While there is no publicly available information on how well the conglomerates are faring under sanctions, neither has paid dividends to shareholders since the coup. MyTel, a joint venture with the Vietnamese Ministry of National Defence, has lost money every quarter since the coup.

This is not insignificant. All military personnel have a portion of their pay cheques invested in these firms every month. Dividend payments are essential for the well-being of poorly paid military personnel; junior officers earn as little as 300,000 kyat (US$143) a month.

Some companies are avoiding doing business with the military. For example, Taiwan’s Evergreen and Singapore’s Transworld had announced that they would no longer use the three military-owned ports. The Japanese brewer Kirin also said that it would exit its joint venture with MEHL, even though the deal had not been concluded.

Firms have an incentive to set up fronts, especially because they know many foreign investors are itching to return to Myanmar, and the lack of a corporate registry makes due diligence all but impossible.

For example, Myawaddy Trading Limited, a subsidiary of MEHL, established a new firm called Bhone Min Myat to import oil and palm oil, according to Myanmar Now. A second recently established MEHL front company, Ever Meter, has been used to import goods from Singapore.

On March 2, the US Department of Commerce placed Fisca Security and Communications on its trade blacklist for “engaging in human-rights abuses”. Fisca had won tenders to install AI-powered CCTV cameras imported from China’s Hikvision, Huawei Technologies and Zhejiang Dahua Technology.

According to MyCO, Fisca is foreign-owned, and its director is the same individual as the chairman of the Singaporean firm Fisca Systems Asia.

The US blacklisting jeopardises the Singaporean firm’s reputation and potential business. It would be hard to know now if Fisca re-registered and hid behind a corporate front.

Those are the ones we know about, and there are most likely more.

While Singapore has committed to cracking down on Myanmar front companies being used to import weapons, munitions and parts, there is less willingness to sanction other parts of the country.

At the same time, many foreign firms are itching to re-enter the Myanmar market to take advantage of discounted assets or to do business with sanctioned military- and crony-owned firms that are desperate for exports and investment. The inability to do due diligence gives them all the plausible deniability they need to get in bed with the generals.

Likewise, the easy ability to re-incorporate means that Myanmar firms can often evade sanctions, as we just saw with the US sanctions on March 24 against Asia Sun, Myanmar’s largest importer of jet fuel.

Zachary Abuza