Myanmar Junta-Controlled Innwa Bank Continues to Use Global Financial System: Report

By Hein Htoo Zan 3 November 2022

Despite western sanctions, the junta-controlled Innwa Bank continues to make international transactions, according to groups tracking Myanmar’s regime-linked businesses.

Innwa, owned by junta conglomerate Myanmar Economic Corporation (MEC), pays salaries to officers, transfers funds to military units and sustains regime businesses.

The United Nations Independent International Fact-Finding Mission on Myanmar reported that Innwa plays an important role in sustaining the junta’s economic interests and providing its conglomerates and owners with international financial access.

Innwa records released by Distributed Denial of Secrets and Justice For Myanmar (JFM) said Australia’s ANZ and UOB of Singapore are among the international banks transacting with Innwa.

Since US sanctions were announced on Innwa, the Hong Kong-based insurance corporation AIA used ANZ to transfer funds to the bank in August and September 2021.

Malaysian company Edotco, which leases telecoms towers to Mytel mobile operator that is partly owned by MEC, also used ANZ for transactions to Innwa in 2021.

JFM reported on November 2 that ANZ transactions with Innwa have dodged Australian sanctions.

UOB carried out transactions between Chinese-owned Cosco Shipping Lines and MEC in June and July 2021 and between Lamintayar Company Limited, an industrial powered milk supplier to New Zealand dairy firm Fonterra.

It revealed transactions between Innwa and BIDV Bank, which is majority-owned by the State Bank of Vietnam with a 15-percent stake held by South Korea’s KEB Hana Bank.

BIDV is a major provider of credit and financial services to Telecom International Myanmar, the parent company of Mytel. Telecom International Myanmar, which is majority-owned by MEC with a stake held by Viettel Global Investment of Vietnam’s Ministry of National Defence.

The report reveals at least 18 BIDV transactions with Telecom International Myanmar since the 2021 coup involving payments to MEC, MEC subsidiaries Star High, Innwa and Eco Friendly Towers Company Limited.

Innwa records included over 200 transactions with Myanmar’s Yoma Bank, which have mostly taken place since the 2021 coup.

Yoma is controlled by FMI, a holding company listed on the Yangon Stock Exchange led by Serge Pun and backed by major international investors.

Greenwood Capital, an affiliate of Singapore’s sovereign wealth fund, GIC, owns 19.7 percent of Yoma, the Norwegian development finance institution Norfund has 10.6 percent and International Finance Corporation of the World Bank Group 4.5 percent.

Yoma transactions are with MEC, military personnel, Best Oil Company Limited, Pinnacle Asia and Meditech.

Best Oil is a wholesale oil importer and distributor that has a seat on the junta’s oil-purchasing committee.

Pinnacle Asia is linked to Khin Thiri Thet Mon, the daughter of junta chief Min Aung Hlaing. Yoma issued a loan to Pinnacle Asia in 2020 to build Mytel’s telecoms towers.

Meditech is a medical equipment distributor that represents Siemens in Myanmar and supplies Myanmar’s armed forces.

On March 25, 2021, the US imposed sanctions on MEC in response to the coup. The UK followed on April 1 and the EU sanctioned MEC on April 19. The sanctions apply to Innwa as an MEC-owned company.

JFM called on Australia, Singapore, Japan and South Korea to impose sanctions on MEC and the junta-owned Myanma Economic Holdings Limited.

The activist group said junta crimes are enabled by the international financial system and banks should ban all transactions with regime-linked banks and firms or risk complicity with its atrocities.