“Shared corruptions” with Maldives worth hundreds of millions, reports Democratic Voice of Burma

The Burmese authorities actively helped the Maldives “cover its tracks” while the Singapore branch of the State Trading Organisation (STO) funneled discounted OPEC oil to the junta using fraudulent paperwork and sold it at a premium, the Democratic Voice of Burma (DVB) has reported.

The DVB is describes itself as a non-profit news organisation providing accurate and unbiased news to Burma.

Referring to a draft report into the activities of STO Singapore compiled by forensic accountancy firm Grant Thorton on request of the Maldives government, “STO Singapore appear to have purchased fuel from Shell Eastern, the Singapore Petroleum Company and Petronas, and then sold it to STO, its parent company, or to third parties,” DVB said.

“The Maldives is given a special, cheap allocation of oil by OPEC because of the cartel’s preferential treatment for 100 percent Sunni Muslim nations, so the tiny island state under [former President] Gayoom would assume a far larger allocation of oil than the residents of the country needed,” it added.

Shipments destined for the Maldives would never arrive, and bills of lading recording receipt of cargo were missing, the report stated.

Details of the operation first appeared in an article by India’s The Week magazine, which identified the intermediary in the transaction between the two countries as Mocom Trading Pvt Ltd, a joint venture with a Malaysian company called Mocom Corporation Sdn Bhd, that was incorporated in 2004 to sell the oil allocation.

Mocom was one of only four foreign companies permitted to sell petroleum to the junta, alongside Daewoo, Hyundai and Petronas, the report stated – permission granted directly by Burma’s Energy Minister Brigadier-General Lun Thi.

The company had four director-shareholders: Kamal Bin Rashid, a Burmese national, two Maldivians: Fathimath Ashan and Sana Mansoor, and a Malaysian man named Raja Abdul Rashid Bin Raja Badiozaman, who was also Chief of Intelligence for the Malaysian armed forces for seven years. Then Managing Director of STO Singapore Ahmed Muneez was also a director.

According to the Grant Thorton report, the contract with Mocom Corporation revealed that a 40 percent commission on profits under the arrangement was paid directly into an account held by Rashid with the United Overseas Bank account in Singapore. The profits whereabouts beyond this point remain unknown.

When the story first broke, former STO chairman Abdulla Yameen, half brother of Gayoom and now leader of the opposition coalition party People’s Alliance (PA) party, told Minivan News that such trading was not illegal as STO Singapore was an “entrepreneurial” trade organisation that was licensed to trade in goods as well as supply the needs of the STO: “Even now the STO buys from one country and sells to those in need,” he said.

Yameen has acknowledged using the STO’s accounts to transfer money from the Maldives to his children in Singapore during his time as Chairman, but claims this was a legitimate means of avoiding foreign exchange fees.

The Week article had cited a source in the Singaporean police as stating that both Yameen and STO Singapore were under investigation. Minivan News contacted Singaporean police seeking to confirm the report, but was told by a police spokesperson that “It is inappropriate to comment on police investigations, if any.”

Obfuscation and heroin links

The DVB reported on several Burmese companies named in the Grant Thorton report as linked to Mocom.

“Among the companies who did business with the Maldivians was Kanbawza Bank, owned by Aung Ko Win, who is close to Burmese vice-general Maung Aye,” DVB reported.

Kanbawza Bank was “no stranger to controversy”, it noted.

“The bank was started in Shan state by the then-unknown and apparently ‘asset-less’ teacher, Aung Ko Win, who happened to meet and befriend Maung Aye. From mysterious profits made in the Shan hills – once the world’s largest source of opium – the bank has grown to become one of the biggest and most important financial institutions in Burma.”

Other companies which were doing business with the Maldives included Golden Aaron and S H NG Trading Pte Ltd, recorded active trading in 2002. During this period, according to the invoices obtained by Grant Thorton, STO revenue increased dramatically to $US78.8 million.

Both these Burmese companies are facing international sanctions, noted DVB, and are owned by Steven Law and his Singaporean wife, Cecilia NG. Law’s father, Lo Hsing Han, is described by the US government’s Office of Foreign Assets Control (OFAC) as “the godfather of heroin”.

Most of the Maldives’ heroin since the 1990s is of the ‘brown sugar’ variety of Afghan or Pakistani origin. However, according to the UN Office of Drugs and Crime Representative for East Asia and the Pacific, Gary Lewis – cited in the DVB report – a wave of ‘china white’ heroin appeared on the streets of Male’ in 2003.

The vast majority of this variety, many times stronger than brown sugar, is produced in Burma.

The DVB report concluded that details such as those appearing in the Grant Thorton report currently “ask more questions than they answer.”

But the outline of STO Singapore’s operations thus far suggested that the “shared corruptions” between Burma and the Maldives were “worth hundreds of millions, [from] which [it] will take generations to fully recover.”