ZAW ZAW: A CRONY ON THE RISE

C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 001107 SIPDIS SIPDIS STATE FOR EAP/MLS, INR/EAP, EEB/TFS PACOM FOR FPA TREASURY FOR OASIA E.O. 12958: DECL: 11/15/2017 TAGS: ECON EFIN PREL PGOV BM SUBJECT: ZAW ZAW: A CRONY ON THE RISE RANGOON 00001107 001.2 OF 003 Classified By: Economic Officer Samantha A. Carl-Yoder for Reasons 1.4 (b and d) ¶1. (C) While Tay Za and Steven Law remain the regime's favorite cronies, Zaw Zaw, Managing Director of construction company Max Myanmar and Chairman of the Myanmar Football Federation, is an up and coming crony. Zaw Zaw actively seeks favor with the senior generals, and competes with Tay Za for key construction projects by volunteering to do them at a lower cost. The GOB gave Max Myanmar the concession for all the roads in Nay Pyi Taw, and paid the company with import licenses, properties, and housing development permits. In addition to his construction company, Zaw Zaw controls most used car and motorcycle imports, has a concession for timber exports, and owns two luxury hotels. He is close to Maung Aye and Than Shwe's grandson, Nay Shwe Thway Aung. End Summary. Money in Motor Vehicles -------------- ¶2. (C) Zaw Zaw, the son-in-law of Thein Tun (the man who brought Pepsi to Burma),is one of Burma's youngest tycoons. He lived in Japan for several years in the early 1990s, where he made his fortune by exporting used cars and motorcycles to Burma. Zaw Zaw returned to Burma in 1994 and established Max Myanmar in 1995. According to our business contacts, Max Myanmar is primarily a construction company, although it also exports timber products to China. Zaw Zaw also has the sole official right to import used cars and motorcycles, and has licenses to sell these vehicles in Rangoon and Mandalay. Anwar Hussain (PROTECT),a prominent businessman and member of the Tuesday Breakfast Club (a group of businessmen who meet regularly to discuss business issues in Burma),informed us that Zaw Zaw is the main provider of motorcycles to the Burmese regime. Special Branch Police officers are among the few still permitted to ride motorcycles in Rangoon. ¶3. (C) In recent years, Zaw Zaw has increased his profile with the Burmese government. According to our business contacts, Zaw Zaw wants to be a favorite of the regime, and often volunteers to work on key government projects. Hussain noted that Zaw Zaw often competes with Tay Za for construction contracts, usually offering to complete the job for a cheaper price. Although the senior generals continue to favor Tay Za, they have awarded Zaw Zaw several important contracts in recent years. Max Myanmar was one of eight companies that built Nay Pyi Taw; Zaw Zaw's firm held the sole concession to build the main road in the new capital. He also built the Royal Kumudra Hotel, one of Nay Pyi Taw's first five-star hotels. Instead of being paid for the construction work, Zaw Zaw received ten permits, valued at $180,000 each, to import new cars. (Note: Tay Za and Steven Law each received fifteen permits for work done in Nay Pyi Taw. End Note.) He also received several properties in Rangoon, where he plans to construct housing developments. ¶4. (C) Our business contacts all agree that Zaw Zaw used his construction business to form a relationship with the senior generals. Even though he does not profit financially from government contracts, Zaw Zaw continues to volunteer for additional projects, Hussain noted. The only way he can compete with Tay Za and Steven Law is by volunteering his services, Hussain continued. The more he builds, the more credibility he gains in the eyes of the senior generals. Varied Portfolio -------------- RANGOON 00001107 002.2 OF 003 ¶5. (C) In addition to Max Myanmar and the Royal Kumudra Hotel, Zaw Zaw also owns Hotel Max in Chaungtha Beach, located 130 miles west of Rangoon in Irrawaddy Division. According to U Kyaw Tan, owner of Sun Far Ticketing and Travels, Hotel Max is the most luxurious hotel in the area, with a mini golf course, tennis court, swimming pool and jet ski facility. Zaw Zaw also continues to import cars and motorcycles, and maintains a concession to export timber products. Several contacts reported that the GOB recently gave Zaw Zaw control over a five hundred acre jade mine in Lonkin, Kachin State. While Max Myanmar does not yet mine and export jade, Zaw Zaw plans on expanding operations in the next few years, Hussain commented. ¶6. (C) Zaw Zaw also views himself as a humanitarian, our business contacts stated. He consistently donates millions of kyats to government projects, such as education planning and tourism development. In 2003, Zaw Zaw volunteered to chair the Tennis Federation of Myanmar. Two years later, in February 2005, the GOB appointed Zaw Zaw as head of the 14-member executive committee of the Myanmar Football Federation (MFF). Previous chairs of the MFF include Tay Za and U Aung Win, managing director of Dagon International. According to Hussain, being appointed chair of the MFF is very prestigious, and shows the close relationship between Zaw Zaw and the regime. As Chair of the MFF, Zaw Zaw sponsors the national team, hosts sporting events, and hires and trains athletes and staff. Relationship with the GOB -------------- ¶7. (C) Zaw Zaw's connections to the senior generals are based on his father-in-law's friendship with Maung Aye, Martin Pun (PROTECT),a prominent businessman and Chair of the Tuesday Breakfast Club, informed us. In recent years, Zaw Zaw, who is in his mid-to-late 30s, has formed a close relationship with Than Shwe's grandson, Nay Shwe Thway Aung, a football enthusiast. Saman Sarathchandra, General Manager of Sedona Hotel, confirmed that Zaw Zaw hosted Nay Shwe Thway Aung's football-themed 16th birthday party at Sedona Hotel in June 2007. More than 1,000 people attended the party, which cost Zaw Zaw more than $25,000. Company Information -------------- ¶8. (SBU) The following is contact information for Zaw Zaw's businesses: --Max Myanmar. Address: 1 Ywama Curve, Bayint Naung Road, Block-2, Hlaing Township, Yangon, Myanmar. Phone: 95-1-530-601, 95-1-530-602, 95-1-530-603. --Royal Kumudra Hotel. Address: 9 Hotel Zone, Nay Pyi Taw, Myanmar. Phone: 95-67-414-188, 95-67-414-192, 95-67-414-192 --Hotel Max. Address: Chaungtha Beach. Telephone: 95-42-42346, 95-42-42347. Comment -------------- ¶9. (C) Zaw Zaw is one of several mid-level cronies that actively do the Burmese regime 's bidding. As Tay Za finds it harder to do business in Burma due to U.S. sanctions, Zaw Zaw may try to step into his shoes. To tighten the financial squeeze on both the regime and its key cronies, we should add Zaw Zaw and his companies to the targeted sanctions list. RANGOON 00001107 003.2 OF 003 VILLAROSA