Myanmar party chief’s ouster rocks his family businesses

YANGON — The dismissal of the head of Myanmar’s ruling party is creating a stir in business circles, threatening the future of companies run by his relatives.

RedLink Communications is a top player in Myanmar’s rapidly expanding Internet service business, boasting the largest share. Hopes were growing that the company would go public on the Yangon Stock Exchange, expected to open later this year. But uncertainty is mounting over its outlook now that President Toe Naing Mann’s father, Shwe Mann, has been ousted as chairman of the Union Solidarity and Development Party.

Shwe Mann was the No. 3 leader in the old military government. After democratization began, he remained a big player in national politics as chairman of the USDP, where former military officers hold important posts. He had grown close to Aung San Suu Kyi’s opposition National League for Democracy in recent years, exploring the possibility of forming a coalition government after November’s general election.

The USDP suddenly booted Shwe Mann from the chairmanship Aug. 13 — officially, to lighten his burden from doubling as speaker of the lower house. In reality, he appears to have been purged in a “coup” of sorts by core USDP officers unhappy with his cozying up to the largest opposition party.

Established in 2008, RedLink is a latecomer among Myanmar’s Internet service providers but has led the pack in offering WiMax and other high-speed services, rapidly expanding in such urban markets as Yangon. Obtaining government licenses is key to success in the communications industry. Shwe Mann’s strong influence on the oversight agency had been considered the company’s strength but could now prove an Achilles’ heel.

“There is no reason why we, a socially responsible company paying taxes, should be hurt,” President Toe Naing Mann told a local publication after his father’s ouster as party chairman. But the company’s growth is certain to hit a speed bump, according to a local analyst. As if to back up this view, a RedLink group radio station suspended broadcasting after the Shwe Mann incident — an apparent move by Thein Sein’s government to purge business circles of the ex-USDP chairman’s influence.

RedLink is not the only business owned by family members of Shwe Mann. Another son, Aung Thet Mann, runs palm oil company Ayer Shwe Wah. Toe Naing Mann’s father-in-law owns Zaykabar, a conglomerate focused on real estate. Overseas companies that had been actively doing business with these enterprises are now “closely watching the impact of the political development,” said a source at a Japanese trading house.

Cozy relationships between leading politicians and businesses are hardly rare. Emerging conglomerate Max Myanmar’s chairman, Zaw Zaw, has close ties with a grandchild of former Senior Gen. Than Shwe, who once headed the military government.

Source: Nikkei Asian Review

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