Former Myanmar Government Officials Accused in Gem Fund Embezzlement Scandal

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Kyaw Kyaw Oo, executive member of the Myanmar Gems and Jewellery Entrepreneurs Association, speaks at a press conference in Yangon, June 2, 2016.
Kyaw Kyaw Oo, executive member of the Myanmar Gems and Jewellery Entrepreneurs Association, speaks at a press conference in Yangon, June 2, 2016.

UPDATED at 4 P.M. EST on 2016-06-09

Members of a Myanmar gem association called on authorities on Thursday to investigate the disappearance of roughly U.S.$100 million from its funds, including U.S. $1.1 million allegedly taken by former President Thein Sein, said one of the group’s members.

Kyaw Kyaw Oo, an executive member of the Myanmar Gems and Jewellery Entrepreneurs Association, told reporters at a press conference in Yangon that the trade group’s members have demanded that the new National League for Democracy (NLD) government take action against the previous administration for its role in the embezzlement scandal.

The fund, opened under the Ministry of Mines during former President Thein Sein’s government, contained about $104 million accumulated from fees paid by entrepreneurs who worked in the gem industry, according to a Myanmar Times report.

Win Htein, director general of the Department of Mines and chairman of a tribunal investigating the matter, said the value of the fund has dwindled to less than U.S. $8 million, the report said.

“First we heard €7 million [U.S. $7.8 million] from the fund was given to the former president,” Kyaw Kyaw Oo said. “So we raised the issue with retired Colonel Win Htein, who is now presiding over an inquiry committee. He said that only €1 million [U.S. $1.1 million] was given to Thein Sein. It’s on a recording.”

Allegations rejected

Also on Thursday, former Minister of Mines Myint Aung, who was appointed by Thein Sein in September 2012, told a press conference in the administrative capital Naypyidaw that the allegations against the former president were false, and that the missing money had been properly spent and accounted for.

“Now we can clear up everything,” he told reporters at the conference. “We didn’t have any corruption here. What we had done was decided by the central committee [of the Myanmar Jade and Gems Emporium], not by a single individual, and it was carried out according to working protocol.”

The emporium is the country's largest gem marketplace where local retailers and producers of finished products purchase millions of dollars of precious stones.

The money was distributed to areas in various states and regions that needed development funds, Myint Aung said. Of the U.S. $7.8 million in question, Thein Sein placed U.S. $1.1 million in the Ministry of Construction’s bank account, he said. The remainder, which was raised separately from businessmen, also remains in the bank.

Myint Aung said he will seek legal action against those who have accused former government ministers and Thein Sein of embezzling funds from the trade association, state-run Global New Light of Myanmar reported.

Some current members of the Myanmar Jade and Gems Emporium's central committee and the gem association signed a petition urging Shwe Mann, the ousted former parliamentary speaker under the former ruling Union Solidarity and Development Party (USDP), to take up the alleged corruption case in parliament’s Legal Affairs and Special Cases Assessment Commission.

In February, State Counselor Aung San Suu Kyi appointed Shwe Mann, whom she considers an ally, to lead the legal advisory panel.

At a press conference addressing the complaint on May 30, Zaw Myint Pe, a member of the parliamentary commission, recommended that an independent body be created to investigate the matter, the Global New Light of Myanmar report said.

Precious stones are weighed at a gem merchant's house in Mogok, some 125 miles northeast of Mandalay in central Myanmar, May 25, 2015. Credit: NurPhoto
Precious stones are weighed at a gem merchant's house in Mogok, some 125 miles northeast of Mandalay in central Myanmar, May 25, 2015. NurPhoto
Politically motivated?

In the meantime, the complaint and embezzlement accusations have been submitted to President Htin Kyaw, Aung San Suu Kyi, the Ministry of Home Affairs, Bureau of Special Investigation, Ministry of Mines, Mining and Resource Affairs Committee, and Myanmar’s upper house of parliament, the Myanmar Times report said.

Former information minister Ye Htut, who also served as Thein Sein’s spokesman while he was in office, told reporters at the Naypyidaw press briefing that the trade association’s accusations are politically motivated.

“This is a problem within the jewelry organization where many of the complainers are members of the Myanmar Jade and Gems Emporium Central Committee,” he said.

The association should have first raised the issue of the missing funds at its own meetings, and then filed a complaint with the government if no satisfactory explanation was made, he said.

“The complaint should have gone to administrative authorities of the government led by President Htin Kyaw, the parliamentary committee which oversees mining, or the complaints and appeals committee,” Ye Htut said. “But instead, the [association] sent the complaint to parliament’s special commission led by many ousted USDP leaders.”

“This raises questions as to whether the reason behind the move might be a political one that runs deeper than organization’s internal affairs,” he said.

The NLD government, which took office in early April, has announced that it plans to combine the Ministry of Mines and Ministry of Environmental Conservation and Forestry into a new Ministry of Natural Resources and Environmental Conservation.

Myanmar's jade industry alone is worth U.S. $31 billion, according to a report issued last October by London-based anti-corruption and environmental advocacy group Global Witness.

The group said a network of former generals, drug lords, and crony businessmen—including former junta chief Than Shwe and senior figures in Myanmar’s military-backed USDP—tightly control the jade industry and keep the sector’s vast profits exclusively for themselves.

Reported by Myo Zaw Ko, Myo Thant Khine and Win Ko Ko Latt for RFA’s Myanmar Service. Translated by Kyaw Min Htun. Written in English by Roseanne Gerin.

CORRECTION: An earlier version of this story mistakenly referred to the government's Central Executive Committee instead of the central committee of the Myanmar Jade and Gems Emporium.





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