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Tay Za: Burma’s Fading Business Tycoon?
By Aung Zaw November 12, 2007
A close business associate of Tay Za has revealed that the young tycoon, who was recently targeted with fresh US sanctions, is considering retirement and is in debt to the tune of about $US 30 million.
The source also told The Irrawaddy that Tay Za has become the victim of a smear campaign by rival businessmen and government officials loyal to former prime minister Gen Khin Nyunt, who is currently under house arrest.
The new sanctions against the Burmese junta, imposed by the US government on October 19, froze the bank accounts of an additional 25 military officials and 12 businessmen or business entities closely associated with the regime.
Tay Za, who was previously thought to enjoy a close relationship with Burma’s top brass, is not in fact as close as the press reported, according to the Rangoon-based business source, who recently had a meeting with a correspondent of The Irrawaddy.
Tay Za and Snr-Gen Than Shwe were first linked when the junta leader and his family made an unannounced visit to the Irrawaddy delta to relax at a resort owned by Tay Za.
At the time, Than Shwe was avoiding UN special envoy Razali Ismail. He unexpectedly turned up at the Ngwe Saung beach resort with his family and was warmly received by Tay Za and his staff.
Impressed by the young tycoon’s hospitality and management of the resort, Than Shwe recommended his regional commanders and ministers to learn from Tay Za. “He (Tay Za) is pure Burmese and Than Shwe—who wanted to promote local Burmese businessmen—was impressed by him,” said the source.
Than Shwe reportedly dislikes Indian and Chinese businessmen who he believes control too much business in Burma. After the trip, Than Shwe kept talking about Tay Za, various business sources have reported.
Tay Za was then 39, but had already invested in the timber business and hotels. In Burma, where connections to high places play a key role in business circles, praise and blessings from Than Shwe boosted his business empire substantially.
Tay Za is no stranger to the military generals. His father, Lt-Col Myint Swe, in his 80s, is a retired army officer and has several close connections with army officers. Tay Za courted army officers’ favors as early as the 1990s, said the source.
Tay Za himself attended Defense Services Academy Intake 27, but did not finish the military school at Pyin Oo Lwin as he eloped with girlfriend Thida Zaw. He went into the timber business with an initial capital investment of $333,333, setting up Htoo Trading Company. Tay Za began exporting timber and, over the years, gained logging rights over vast tracts of virgin forests.
In the early days, one young officer who was well acquainted with Tay Za was Shwe Mann, now third-highest ranking man in the ruling council. Aung Thet Mann, Shwe Mann’s son, joined forces with Tay Za in 1997.
Aung Thet Mann, who is also on the US sanction list, is on the board of Htoo Trading Company, and Aung Thet Mann’s own company, Ayer Shwe Wah, is a subsidiary of Htoo Trading Company.
Aside from Shwe Mann, Tay Za was known to use his silver tongue to forge good relations with other senior government officials. Gen Thein Win, then the regime’s air force chief, also benefited from Tay Za’s business savvy. Tay Za approached Thein Win to purchase some helicopters and light aircraft from Russia on behalf of another of his enterprises, Myanmar Avia Export. As sole representative of the Russian helicopter company, Tay Za successfully sold several Russian-made helicopters to the regime. The source said that about 18 Mi-17 helicopters were sold to the Burmese regime through Tay Za.
The purchase was timely—in 1994, the army launched an attack on the rebel headquarters at Manerplaw and the helicopters and light aircraft were employed to carry soldiers, food supplies and ammunition.
Mi-17s can carry up to 30 troops or wounded and can also be heavily armed with rockets and missiles to attack insurgents’ strongholds. The helicopters were used in battles against the Karen National Liberation Army in 1994 and 1995. The Karen headquarters of Manerplaw fell to the Burmese army in 1995.
Tay Za, sole agent of aircraft-maker Russian Export Military Industrial Group, known as MAPO, was attributed with the sale of MiG-29 jet fighters to the regime. However, the business source denied that Tay Za was involved in selling the MiG-29s to the Burmese regime.
The source went on to say that because of the US sanctions, Tay Za has to seriously consider streamlining his business empire.
The source said that Tay Za-owned Air Began is making no profit, instead losing some $1 million a month. Singapore Airlines has recently recalled its engineers from Air Bagan. The business source estimated that the company’s domestic and international routes could be grounded within six months
The source added that although Air Bagan has invested millions of dollars in recruiting staff and training pilots, it is now losing quality staff members.
“He (Tay Za) is now thinking of how he’s going to pay salaries to his staff,” the source said. The company has some 14,000 staff.
Soon after the US sanctions, on November 4, Air Bagan Ltd suspended flights from Rangoon to Singapore, citing the effects of the economic sanctions against the airline's owner, Tay Za.
Tay Za has since slammed the US sanctions against his airline and other businesses with reputed links to the ruling junta, saying only the people of Burma would suffer.
“I condemn the sanctions which will hurt the general public and have little effect on the government,” Tay Za told employees and officials gathered at a hotel on November 5 to mark Air Bagan’s third anniversary.
The source close to Tay Za claimed that Air Bagan was fully owned by Tay Za, deflecting accusations that Than Shwe’s family had shares. “Air Bagan Ltd is a legally constituted company with funds earned through 100 percent legitimate means,” Tay Za said, adding that no government official or party outside the Htoo group held shares in the airline.
The anonymous source also confirmed that during the crackdown in September, Tay Za left Burma and went to Dubai with his staff members, but not with Than Shwe’s wife and family. “Tay Za rented three rooms at the Dubai Burj Al Arab, but with his office staff,” the source said.
“It was just a business meeting,” the source added. But rumor has it that Tay Za wanted to move assets and bank savings from Singapore to Dubai.
The source concluded that Tay Za and his board of directors are seriously thinking of retiring from business. “He is really hurt by the sanctions,” the source said.