The coup regime is set to approve the sale of Telenor Myanmar to a firm owned by a military-linked conglomerate within days, an industry source has told Myanmar Now, in a move widely expected to strengthen the junta’s surveillance powers.
Telenor has refused to confirm who the final owner of its operations will be, but industry sources and leaked documents show it will be Investcom Myanmar, which will be majority-owned by a gems and petrol conglomerate named Shwe Byain Phyu.
In a letter sent earlier this month to Telenor, seen by Myanmar Now, the junta’s regulator discussed the ownership structure of Investcom Myanmar, a joint venture between Shwe Byain Phyu and Lebanon’s M1 Group.
The industry source said the regulatory paperwork for the deal will be finalised by the end of this week. “The sale process is almost complete,” they told Myanmar Now. “Telenor top management is rushing very quickly these days to fulfil the remaining paperwork.”
Telenor said: “We are awaiting regulatory approval for the sale to M1, and do not have comments on speculations in the market.” The sale is expected to be finalised soon after the junta’s regulator gives its approval.
Investcom Myanmar is not yet listed on the Directorate of Investment and Company Administration database, but a company called Investcom Pte is registered in Singapore, where its owners are listed as Shwe Byain Phyu and M1 Group.
Telenor spokesperson Cathrine Stang Lund told Myanmar Now that “Telenor is selling the share of Telenor Myanmar to M1 Group” but refused to comment on the fact that Shwe Byain Phyu will become the majority shareholder after the sale.
In October, junta officials blocked the proposed sale of Telenor Myanmar to M1 Group alone, preferring instead to have the Lebanese company work with a local partner, Reuters reported.
Telenor, once praised for its “responsible” behaviour in Myanmar, has faced widespread criticism for the manner in which it is exiting the country.
Telenor Has Shared Sensitive Customer Data With Military Since The Coup: Industry Sources
The revelation comes as Telenor prepares to finalise the sale of its Myanmar unit to a military-linked company later this month
Lack of transparency
Activists say M1 Group, owned by Lebanese Prime Minister Najib Mikati and his brother Taha, has reaped profits working with despotic regimes around the world and is unlikely to prioritise customers’ privacy.
Telenor Myanmar employees sent a letter on Wednesday calling on the chair of Telenor’s board of directors, Gunn Wærsted, to “immediately intervene to terminate the sale”.
The letter accused Telenor of a “lack of transparency with employees” regarding the sale.
A Norwegian MP and member of a parliamentary committee on finance and economic affairs, Mahmoud Farahmand told Myanmar Now that the sale will damage the movement against Myanmar’s dictatorship. “I’m afraid the impact on people who are asking for their basic human rights will be huge,” he said. “The entire democratic movement of Myanmar will be hurt severely.”
He also questioned why Telenor has agreed to sell the personal data of its 18 million subscribers, including call logs, as part of the deal. “The identity of these people will be available to local authorities and that will harm these people as individuals and also the entire movement,” he said.
“I’m quite surprised Telenor hasn’t taken any action earlier to at least make sure that the personal information doesn’t get into the wrong hands,” he added. “They could have sold the infrastructure but deleted all the identities. That’s possible. You could delete all the identities, all the conversation logs, and just sell the infrastructure. But they have chosen not to do that it seems. That is what annoys me about this process.”
‘Complicit with terrorists’
Two members of the military council will be involved in the acquisition of Telenor Myanmar by Shwe Byain Phyu, Myanmar Now’s source said.
Investcom Pte was incorporated in Singapore on July 29 last year, three weeks after Telenor’s announcement of the sale of its local unit. Its directors include Azmi Mikati, the CEO of M1 Group, and Jamal Ramadan, the CEO of M1 Enterprises.
Shares in Investcom’s Singapore business were initially held by M1 Infrastructure, a shell company registered in the Cayman Islands, an offshore tax haven.
On January 20, 49 per cent of the shares were transferred to Shwe Byain Phyu Telecom Co Ltd, with the remaining 51 per cent held by M1 Infrastructure, according to data from Singapore’s Accounting and Corporate Regulatory Authority (ACRA).
Shwe Byain Phyu Telecom, which was previously registered as Shwe Byain Phyu Manufacturing Co Ltd and changed its name on November 3 last year, will be the majority owner of Investcom Myanmar, sources said.
Activists at Justice For Myanmar said last week that Telenor will be complicit with a “terrorist junta” if it goes ahead with the sale. They also accused the company of a “cover-up”, saying Telenor sought to hide the fact its operations would be sold to a military-linked company.
“According to new evidence seen by Justice For Myanmar, Telenor stated to the junta’s telecommunications regulator in October that their deal with M1 allows it to transfer ownership to a local company,” the group said in a statement.
“This suggests Telenor is involved in a cover-up with the military junta, knowingly selling to a military-linked company, while misleadingly stating to the public that the sale is to M1 Group,” it added.
The evidence the statement refers to is a letter from Telenor to the junta’s Post and Telecommunications Department, which Myanmar Now has also seen.
On Wednesday, a Telenor spokesperson admitted the company had told the junta its agreement with M1 Group allowed for the transfer of majority ownership to a local company.
“Telenor has confirmed to the regulator that the sales agreement between Telenor and M1 does not prevent M1 from transferring a majority of the shares after the transaction is concluded,” the spokesperson told Myanmar Now.
Myanmar Now also asked why Telenor was selling its stake to M1 Group, given that another company is set to assume majority ownership, but the spokesperson did not respond to this question.
The company, which has repeatedly touted its commitment to transparency in Myanmar since it entered the country in 2014, has until now made no mention of the prospect of its operations being controlled by a military-linked company.
Shwe Byain Phyu was founded in 2000 and operates a group of nine companies with interests in gems mining, petrol, logistics, and manufacturing.
It has a long history of working with the military-owned Myanma Economic Holdings Limited (MEHL); in 2000 the companies entered an agreement to import petrol to Myanmar and share the profits.
Thein Win Zaw, Shwe Byain Phyu’s 59-year-old founder and chair, established a company called Manaw Thitar in 1996 under the rule of dictator Than Shwe. Manaw Thitar later became a subsidiary of Shwe Byain Phyu.
Shwe Byain Phyu’s spokesperson Kyaw Myo Aung told Wired on Tuesday that his company is “not privy” to the details of the Telenor sale and said claims the group is linked to the military were “baseless.”
“We do not do business with the military,” he said.
Corporate data also shows that Thein Win Zaw is a director of Mahar Yoma Public Company, part of a consortium that also has a stake in the military-owned telecoms operator Mytel.
Kyaw Myo Aung told Wired that Thein Win Zaw “has already resigned from the board of directors of Mahar Yoma PLC, which owns just 1 percent of Mytel.”
M1 sent a response to Myanmar Now’s questions after this story was published. The response can be read here.