History
The Union of Myanmar Economic Holdings Limited (abbreviated UMEHL or UMEH) was established in February 1990 under the Special Companies Act as the economic arm of the Burmese military, during a period of privatisation and transition from a socialist command economy, with an initial capital of US$1.6 billion.[10][11] UMEHL was established to generate profits from light industry and the trade of commercial goods.[12]
In the 2000s, several state-owned enterprises, including sugar factories, were transferred to the control of MEHL and MEC.[13] By 2007, MEHL wholly owned seventy-seven firms, nine subsidiaries and seven affiliated companies. Its shares are available to military units, active duty and retired military and veterans' groups, returning a 30% profit since 1995.[14]
The MEHL conglomerate is jointly owned by two military departments; 40% of shares are owned by the Directorate of Defence Procurement while 60% of shares are owned by active and veteran defence personnel, including high-ranking military officials of the former ruling military junta, the State Peace and Development Council (SPDC) and veterans organisations. MEHL is exempt from commercial and profit taxes.[15]
In 2010, MEHL opened Ruby Mart, a 50,000 ft2 5-storey shopping complex in Yangon's Kyauktada Township, in a building that once housed the Ministry of Commerce's Myanmar Agricultural Produce Trading.[16] Between 2009 and 2012, MEHL benefited immensely during a mass privatization of state-owned enterprises and assets, acquiring the Bo Aung Kyaw port terminal and the Myanma Five Star Line in the process.[17]
In May 2012, when the United States suspended sanctions against Burma (Myanmar), sanctions against MEHL were kept in place, because of its affiliation to the Burmese Tatmadaw.[18]
In 2016, after the National League for Democracy assumed power, MEHL privatized its operations and dropped "Union" from its name. In doing so, MEHL diverted the company's profits away from the national budget and direct civilian oversight.
In May 2020, the Ever Flow River Group, which is tied to MEHL, was listed on the Yangon Stock Exchange.[17][19]
In June 2020, the Burmese government launched an investigation over conflicts of interest within the two public agencies, the Myanma Port Authority and customs authority, whose managing director and director-general respectively, also sit on MEHL's board of directors.[17] The practice of appointing MEHL directors to run these trade agencies has been in place since 1990.[17]
Following the February 2021 Myanmar coup d'état, in which the Tatmadaw seized power from the elected civilian government, the United States sanctioned MEHL, for its association with and support of the Tatmadaw,[3][20] impounding U.S.-held assets of the company, and forbidding U.S. nationals from doing business with them.[21][3][20] The United Kingdom promptly followed with sanctions of its own.[22] The American and British sanctions, however, were expected to have little impact, because Myanmar's principal trading partners, in Asia, declined to impose sanctions.[22]
