EDEN GROUP PROSPERING DUE TO REGIME CONNECTIONS

C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 001113 SIPDIS SIPDIS STATE FOR EAP/MLS;INR/EAP, EEB/TFS PACOM FOR FPA TREASURY FOR OASIA:SCHUN TREASURY FOR OFAC E.O. 12958: DECL: 11/16/2017 TAGS: ECON EFIN PREL PGOV BM SUBJECT: EDEN GROUP PROSPERING DUE TO REGIME CONNECTIONS RANGOON 00001113 001.4 OF 003 Classified By: Economic Officer Samantha A. Carl-Yoder for Reasons 1.4 (b and d) ¶1. (C) Summary. Chit Khaing, owner and Managing Director of Eden Group and an up and coming crony, has parlayed his regime connections to amass great wealth, while most Burmese struggle to survive. A prominent construction company, Eden Group received a six-year contract to construct government housing developments and ministry buildings in Nay Pyi Taw. Chit Khaing also has interests in the tourism industry, and owns several restaurants and three luxury hotels in Burma. Despite his close ties with former Prime Minister Khin Nyunt, Chit Khaing has reestablished a strong relationship with the senior generals, particularly number three General Thura Shwe Mann. End Summary. The Rise of U Chit Khaing -------------- ¶2. (C) Chit Khaing, who was born in Danphyu, Irrawaddy Division in 1948, is another prominent businessman with strong connections to the senior generals ruling Burma. Before he became a regime crony, Chit Khaing was a political activist in the late 1980s, and was arrested during the 1988 anti-government protests. According to several business contacts, Chit Khaing's father, a mid-level government bureaucrat, arranged for his release from prison, contingent upon Chit Khaing disavowing his anti-government views. Chit Khaing was released after 30 days in detention, and turned his energies to business. ¶3. (C) Like Steven Law, Chit Khaing prefers to stay out of the spotlight, focusing instead on securing new business contracts and amassing wealth. Chit Khaing made his money in the restaurant and hotel business; he opened his first restaurant, Eden Restaurant, in Rangoon in the early 1980s. In the mid-1990s, he formed the construction company, Eden Group, to build hotels and restaurants around the country. ¶4. (C) According to Martin Pun (PROTECT),a prominent local businessman, when Chit Khaing realized he could make money from the construction business, he shifted his focus away from the tourism industry. He established connections with former Prime Minster Khin Nyunt ten years ago. Subsequently, the Eden Group received lucrative contracts to build several universities, including Panglong University in Shan State and Pakokku University in Bago Division. Although Chit Khaing lost favor after Prime Minister Khin Nyunt was ousted in 2004, he managed to reestablish ties fairly quickly with the regime, Pun commented. ¶5. (C) The Eden Group was one of eight companies that constructed Nay Pyi Taw. According to our business contacts, Eden Group built several government apartment complexes in the new capital, one government ministry building, and a five-star hotel, Thingaha Hotel. Chit Khaing allegedly received a six year construction contract for work in Nay Pyi Taw, which should expire in 2012. Anwar Hussain (PROTECT), another prominent local businessman, informed us that Eden Group will build several new government housing developments as well as new government office buildings in Nay Pyi Taw over the next two years. ¶6. (C) Like Tay Za, Steven Law, and Zaw Zaw, owner of Max Myanmar, Chit Khaing did not receive cash for his construction work in Nay Pyi Taw. Instead, he received property in Bagan and ten import licenses, valued at $180,000 each, to import new cars. According to Surariddhi Boon-Long RANGOON 00001113 002.4 OF 003 (PROTECT),General Manager of Thai Airways, in the past six months, Chit Khaing sold two of his import licenses for $300,000 each, and sold two new cars, both new Mercedes sedans, for $200,000 each. He also imported two Hummers, one of which is for sale to the highest bidder. Not Just Construction -------------- ¶7. (C) In addition to owning a lucrative construction company, U Chit Khaing also owns properties, restaurants, and hotels in Rangoon, Nay Pyi Taw, Bagan, Taungyi in Shan State, and Putao in northern Kachin State. Two of his hotels, Thingaha in Nay Pyi Taw and Aye Tha Ya Golf Resort in Shan State's Taunggyi, are billed as two of the most luxurious hotels in Burma (although still below international standards). In 2004, he paid $4.8 million in cash for the Marina Residence in Rangoon, a luxury serviced apartment that houses many expats. Chit Khaing is currently building two new hotels in Bagan and Ngapali Beach, which will cater to international tourists. He also owns Eden BBB Restaurants, with locations in Rangoon, Bagan, and Mandalay, as well as Signature Restaurant in downtown Rangoon. ¶8. (SBU) In addition to taking on government projects, Chit Khaing also donates a substantial amount annually to various government causes, such as education, health, and war veterans programs. The government appointed Chit Khaing as Chairman of the Myanmar Chinlon Federation (the Burmese variation of the Southeast Asian sport involving a rattan ball). As Chairman, Chit Khaing financially sponsors the national team and promotes various events. Regime Ties -------------- ¶9. (C) According to Anwar Hussain, U Chit Khaing formed his strong relationship with the senior generals based on his willingness to undertake government programs with no financial gain. His close relationship with former Prime Minster Khin Nyunt did not work in his favor, Hussain commented, so Chit Khaing had to work hard to regain the top leadership's favor. Now his closest patron is General Thura Shwe Mann. Other Information -------------- ¶10. (C) Chit Khaing is married to Khin Soe Win. They have five children. He speaks English. ¶11. (SBU) Information on Chit Khaing's businesses follows: --Aye Tha Ya Golf Resort. Address: Aye Tha Ya new city, Taunggyi, Shan State. Telephone: 95-81-242-45, 95-81-242-52. --Eden Group. Address: 30 Shwe Paduk Yeik Mon, Bayint Naung Road, Kamayut Township, Yangon, Myanmar. Telephone: 95-1-500-981, 95-1-500-985. --Eden BBB Restaurant. Address: Bagan Nyang Oo Main Rd., Wet Gyi Inn Village, Bagan, Myanmar. Telephone: 95-61-60-40. --Marina Residence. Address: 8 Kaba Aye Pagoda Rd, Ward 10, Mayangone Township, Yangon, Myanmar. Telephone: 95-1-650-651. --Signature Restaurant. Address: Corner of Kaba Aye Pagoda Road and Kan Yeik Thar Road, Kandawgyi Relaxation Zone, Bahan RANGOON 00001113 003.4 OF 003 Township, Yangon, Myanmar. Telephone: 95-1-548-488, 95-1-543-387. --Thingaha Hotel. 3 Hotel Zone, Nay Pyi Taw, Myanmar. Telephone: 95-67-414-123, 95-67-414-124. Comment -------------- ¶12. (C) Chit Khaing is one of several cronies who financially support the Than Shwe regime. However much the cronies support the regime, they rake in even larger sums for their own personal gain. The losers of these crony relationships are the Burmese people, who receive nothing from the country's rich resources. We recommend adding Chit Khaing to the U.S. targeted sanctions list. VILLAROSA