Shangri-La financing crimes against humanity

April 16, 2021

On prime Yangon land, an upmarket office complex boasts top international tenants: The World Bank, Coca Cola, the American Chamber of Commerce and Yara. While the building operates under the luxury hotel brand Shangri-La, it is on the Myanmar people’s land stolen by the Myanmar army.

Sule Square, developed by Shangri-La Asia, is a product of the military’s systemic theft of public assets and corruption. Through dictatorship and the military-controlled democratic transition, which ended with the brutal and illegal February 1 coup, the military have taken control of lucrative tracts of land and commercialised it, earning off-budget revenue and enriching top generals, outside of any civilian oversight. This revenue, which belongs to the people of Myanmar, fuels the military’s atrocity crimes against them instead of benefiting them.

Since the coup, the military has murdered more than 700 people and is carrying out indiscriminate air strikes in ethnic areas, enabled through their relationship with businesses like Shangri-La.

While most military-owned international real estate developments involve proxy companies, Sule Square stands out as an exception. Shangri-La hold the lease with the army directly, negotiated in the 1990s under Myanmar’s last military dictatorship, through a Kouk holding companies.

Who are the Kuoks?

Tan Sri Robert Kuok is Malaysia’s richest person, with a net worth of US$12.5 billion. He owns the Kuok group and founded Shangri-La group.

Tan Sri Robert Kuok also has stakes in Wilmar International and Kerry Logistics, businesses run by his family members.

His niece, Madam Kay Kuok Oon Kwong runs Shangri-La Hotels Malaysia and is a director of Traders Square, the developer of Sule Square. She is also the chair of the governing board of Yale-NUS College, Yale’s tie-in with National University of Singapore.

The Kuoks have deep ties to the Myanmar military. Under the government led by the Union Solidarity and Development Party (USDP), the military’s proxy party, Kerry Logistics was awarded a contract to build and operate two dry ports for Myanma Railways.

In 2014, also under the USDP-led government, Wilmar International received permission to construct a port terminal in Thilawa, under a build-operate-transfer deal with Myanma Port Authority, a state agency. Myanma Port Authority is run by a director of military conglomerate Myanma Economic Holdings Limited. The Thilawa Special Economic Zone project has involved landgrabbing and the loss of livelihoods.

The Kuoks and the quartermaster general

In 1996, the same year that student democracy protests were brutally crushed by the military, the Kuok Group signed the land lease for Sule Square with the quartermaster general of the Myanmar army. The quartermaster general is a senior military position that is responsible for the purchase of arms and plays a key role in the military’s business empire.

At the signing ceremony, hotel and tourism minister Lt-Gen Kyaw Ba stated that the junta expected the Kuok Group “to spread true and positive information about Myanmar to the outside world”, a sign that the military attempted to use the Kuoks to cover up the junta’s atrocities and corruption. The general also thanked the Singapore government on behalf of the junta, as the Kuok’s investment with the army was channelled through Singapore: “We believe we also owe so much to the Government of Singapore because even in the time when negative issues on our country are spreading all over the world, the Government of Singapore keeps strengthening the bilateral economic cooperation between our two countries.”

In 2012, the ground-breaking ceremony was held, attended by Kay Kuok Oon Kwong and the quartermaster general of the army, further evidence of close and direct ties.

Sule Square was opened in 2017 under management of Shangri-La Asia, who is also the majority owner of Traders Square, according to company disclosures. Traders Square shareholders include shell companies in the British Virgin Islands and one company registered in Samoa, notorious tax havens which allow the company to hide its ownership. Shangri-La Asia is listed on the Hong Kong Stock Exchange.

Neither Shangri-La or the Myanmar army have disclosed details of the land lease payments the quartermaster general receives for Sule Square, but it could be substantial given the high value of the land. Payments to the army for Sule Square belong to the people of Myanmar but the military has kept land lease payments off-budget.

Through continued business with the army, Shangri-La Asia and the Kuok Group are aiding and abetting atrocities, with the complicity of their partners and tenants.

In 2015, Shangr-La appointed Colliers International as the sole leasing representative of Sule Square. Colliers is a Canadian real estate firm listed on the New York Stock Exchange and boasts former Prime Minister Stephen Harper as a director. Colliers also has an office in the complex.

The Globe and Mail sought comment from Colliers International on their links to Sule Square. A spokesperson distanced the firm from their Myanmar franchisee, and when pressed, stated that Colliers is "not in a position to discuss the terms and conditions of the agreement with the franchisee in Myanmar."

Colliers International's response is in breach of their human rights responsibilities under the UN Guiding Principles on Business and Human Rights, the OECD Guidelines and the company's own code of ethics, which applies to affiliates.

Through their business with Sule Square, Colliers remains complicit in the military’s international crimes and corruption.

Sule Square’s major tenants

Sule Square has big-name tenants that continue to lease office space in the building, indirectly supporting the army. Two of Sule Square’s Norwegian tenants were approached by Bistandsaktuelt for comment. A spokesperson for mobile operator Telenor stated that they knew the army owned Sule Square but decided to nonetheless lease office space in the building for the benefit of “employees’ health and safety”.

Yara stated that they were unaware that the army owns the land and stated that they will end their lease if they confirm the information.

Major Sule Square tenants

- American Chamber of Commerce in Myanmar

- CMA CGM

- Coca Cola

- Colliers International

- Dai-ichi Life

- DB Schenker

- Emerging Markets Investment Advisors

- KOBEBUSSAN

- Mastercard

- McKinsey & Company

- Myanmar Hong Kong Chamber of Commerce and Industry

- Prudential

- Rhenus SE

- Sony

- Telenor

- University of Reading overseas representative

- World Bank

- Yara

(Source: DICA and company websites)

Sule Square is an egregious example of international business links to the military through land leases.

In 2019, the UN Fact-Finding Mission recommended that companies to cut commercial ties with the military, including “all of their subsidiaries and business relationships”, specifying real estate rental. Shangri-La, Colliers International and current Sule Square tenants have ignored these recommendations.

As the people of Myanmar are being terrorised by an emboldened military, it is time for businesses and international organisations in Myanmar to end their complicity in atrocities and cut ties with the military.

The international community must urgently impose sanctions on the military, their businesses and significant business associates, including Shangri-La Asia. International business must cut ties with the military.

The military cartel must be dismantled.  Perpetrators and those complicit in crimes of genocide, war crimes and crimes against humanity must be held to account.