BURMA: UPDATE ON CRONY STEVEN LAW'S ACTIVITIES

C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 000298 SIPDIS STATE FOR EAP/MLS, INR/EAP, EEB/TFS PACOM FOR FPA TREASURY FOR OASIA, OFAC E.O. 12958: DECL: 05/21/2019 TAGS: ECON EFIN ETRD PREL PINR BM SUBJECT: BURMA: UPDATE ON CRONY STEVEN LAW'S ACTIVITIES REF: A. RANGOON 25 ¶B. RANGOON 235 RANGOON 00000298 001.10 OF 003 Classified By: Economic Officer Samantha A. Carl-Yoder for Reasons 1.4 (b and d). Summary -------------- ¶1. (C) Steven Law, one of the regime's top cronies, continues to expand his businesses in both Burma and Singapore. The authorities recently awarded Law's Asia World Company the rights to build the new international airport in Nay Pyi Taw, and his newest company, Gold Energy Co. Ltd., is constructing the Thaukyegat (2) Hydropower Project in Karen State. Embassy Rangoon recommends OFAC add Steven Law's newest companies and key management personnel (listed in paragraph 7) to the targeted sanctions list. End Summary. From Airports to Dams -------------- ¶2. (C) Steven Law's Asia World is one of Burma's premier construction companies, building roads and airports throughout the country. Following the successful construction of both the Rangoon and Mandalay International Airports, the Burmese Government awarded Asia World the rights to build the new international airport in Nay Pyi Taw, PB Steel General Manager Wael Elmawie told us. During a recent meeting, Law told Elmawie that Asia World, at the GOB's behest, would begin construction of the Nay Pyi Taw airport, which will include both domestic and international terminals, during the next few months, and is looking for subcontractors and investors. According to Elmawie, Law will receive unspecified funding from the regime, but has also recruited several large Chinese and Singaporean construction companies to either assist with construction or provide capital. Embassy contact Anwar Hussein, who also met with Steven Law about the Nay Pyi Taw airport, speculated that rather than repay the Chinese loans, the GOB, which is funding the project, will pay them in-kind, most likely with timber, jade and gems, or electricity. Construction on the airport is scheduled to end by 2011, although Law told both Elmawie and Hussein he would prefer to complete the airport before the 2010 elections. ¶3. (C) During the meeting with Hussein, , Law explained that one of his subsidiary companies, Gold Energy Co. Ltd., is constructing the Thaukyegat (2) Hydropower project in Karen State and is looking for additional cement and steel providers. According to the New Light of Myanmar, the government's mouthpiece newspaper, Asia World Construction Company and the Ministry of Electric Power-1 signed a memorandum of understanding in May 2008 for this project. Law provided both Hussein and Elmawie with informational brochures on the project, noting that Gold Energy Co. Ltd. expects to complete the 120-megawatt project by mid-2011. Developing Agriculture in the Delta -------------- ¶4. (C) Steven Law's companies continue to be active in the Irrawaddy Delta, rebuilding homes and assisting farmers in the Kungyangon and Dedaye areas. According to SGS Consultants Managing Director U Kyaw Tint, two of Steven RANGOON 00000298 002.12 OF 003 Law's companies -- Asia World and Green Luck Trading Company -- are involved in contract farming in the Delta, assisting farmers by providing them with production inputs and financial resources while maintaining a lien over the land until the farmer repays the loans (Ref A). U Kyaw Tint confirmed that Law continues to have partnerships with many farmers in Kungyangon and Dedaye, and, to his knowledge, has not confiscated any land. ¶5. (C) Asia World documents reportedly confirm that Green Luck Trading Company is establishing a bean and pulses processing plant in Rangoon. Hussein, who is a beans trader, told us that Asia World and Green Luck Trading Company recently began exporting beans and pulses to India and are planning to enter the rice export business. Investing in Oil and Gas -------------- ¶6. (C) According to oil and gas contacts, Steven Law's Golden Aaron Pte., which is already listed on OFAC's targeted sanctions list, has partnered with Chinese National Offshore Oil Corporation (CNOOC) to develop CNOOC's M2, M10, and A4 offshore blocks (Ref C). Terry Howe, General Manager of Myanmar Petroleum Resources Ltd., told us that Law brokered CNOOC's production sharing contracts with the Myanmar Oil and Gas Enterprise (MOGE) in 2004. In the past two years, Law has financially supported CNOOC's offshore exploration, paying up to USD 20 million to drill exploratory wells in M10, Howe stated. Company Information -------------- ¶7. (SBU) Below is information on additional companies owned by Steven Law. Information was obtained from business cards, as well as company investment profiles. -- Asia World Industries Limited; No 61/62 Bahosi Development, Wadan Street, Lanmadaw Township, Rangoon; Telephone: 95-1-225-271; 95-1-225-982, 95-1-225-184, 95-1-222-422, 95-1-224-067, 95-1-224-068; Fax: 95-1-227-989, 95-1-227-553. General Manager: Aye Aye Aung. -- Gold Energy Co., Ltd; No 74 Lan Thit Road, Insein Township, Rangoon; Telephone: 95-1-220-118; Fax: 95-1-228-012. -- Gold Energy Co., Ltd; Taungngu (Tungoo) Branch, Karen State; Telephone: 95-54-241-67; 95-54-253-90; Fax: 95-54-25391. -- Gold Energy Co., Ltd; Thaukyegat (2) Hydropower Project; Telephone: 95-1-333-6052; 95-1-6634; email: awc88@asiaworld.com.mm; u1maung@gmail.com. -- Green Luck Trading Company; No 61/62 Bahosi Development, Wadan Street, Lanmadaw Township, Rangoon; Telephone: 95-1-225-271; 95-1-225-982, 95-1-225-184, 95-1-222-422, 95-1-224-067, 95-1-224-068; Fax: 95-1-227-989, 95-1-227-553. -- Laminated Woven Bag Factory; No 125 Muse Street, No 1 Industrial Zone, Dagon Myo Thit (S),Rangoon; Telephone: 95-1-591-114, 95-1-591-420, 95-1-591-421. General Manager: Aye Aye Aung. RANGOON 00000298 003.6 OF 003 -- Myanmar Paper Mill; No 126 Muse Street, No 1 Industrial Zone, Dagon Myo Thit (S),Rangoon; Telephone: 95-1-591-113, 95-1-591-416, 95-1-591-423. General Manager: Aye Aye Aung. -- Mosquito Coil Factory; No 247(B) Muse Street, No 1 Industrial Zone, Dagon Myo Thit (S),Rangoon; Telephone: 95-1-591-478, 95-1-419. General Manager Aye Aye Aung. Embassy Recommendation -------------- ¶8. (C) Steven Law is one of the regime's foremost cronies, using his connections with the regime to obtain lucrative government contracts. He, his family, and many of his companies are already listed on OFAC's targeted sanctions list. Embassy Rangoon recommends OFAC designate the above-mentioned companies and senior management under the JADE Act. DINGER