An Amyotha Hluttaw representative from the NLD was listed as auditor of a development foundation that allegedly donated K1.7 billion collected from oil producers to the USDP.
By HTUN KHAING & NYAN HLAING LYNN | FRONTIER
A NATIONAL League for Democracy lawmaker has denied any connection to a K7.5 billion corruption scandal in Magway Region, despite being auditor of the foundation that received the bulk of the funds.
The revelation comes as former Magway Region chief minister U Phone Maw Shwe offered to return more than K3.2 billion to the regional government by the end of July, including the K1.7 billion allegedly funneled to the Union Solidarity and Development Party.
The missing K7.459 billion (US$5.46 million) was raised through a tax on small-scale oil producers in the region, which is rich in natural resources.
U Hla San (Amyotha Hluttaw, Magway-1), a prominent businessperson from Magway, said he only learned that he was auditor of the Magway Region Development Foundation when the scandal recently broke.
“I knew some time ago that this investigation was underway but I only learned later that my name was connected to that foundation,” Hla San told Frontier in an interview in Magway on April 29.
Asked about Hla San’s links to the scandal, NLD spokesperson U Nyan Win said the party doesn’t know much about it.
Police began investigating the oil funds after an NLD lawmaker from Magway, U Tun Tun, submitted a question to the Pyithu Hluttaw in May 2016 concerning allegations that the money had been misused by the former government.
Little information about the development foundation has been released to the public. It is not clear who led the foundation or where its office was based.
An investigation by the Ministry of Home Affairs’ Bureau of Special Investigation alleged that the foundation “donated” K1.7 billion to the USDP. BSI says another K1.57 billion went to a microfinance organisation, Shwe Thukha, and the whereabouts of a further K4.2 billion are still under investigation.
The police probe – which included interviews with dozens of witnesses and people allegedly involved – discovered that the Magway Region Development Foundation had been abolished when it still held K1.7 billion in cash.
Hla San runs a construction material shop and is known for having good relations with both Phone Maw Shwe and members of the pro-democracy movement, including from the NLD, 88 Generation and other political groups.
He said he was a regular participant in social welfare works in Magway and chaired the town’s free funeral service society. Other organisations often list him as a member, even though he is not involved, he said.
“There are some cases where my name has been listed although I’m not really involved,” Hla San said. “[BSI] did not investigate me. They did not because I have nothing to do with it.”
Frontier spoke to three people who have also been investigated by BSI. Like Hla San, they said they only knew that they had been connected to the foundation when the scandal broke. All spoke to Frontier on condition of anonymity.
The investigation has already yielded some results, with Phone Maw Shwe returning “at least” four vehicles and one backhoe to the Magway Region government on April 29, it said in a statement. The vehicles were allegedly “donated” to the USDP by the development foundation.
Phone Maw Shwe, who was chairman of the USDP branch for Magway Region until August 2016, also offered to return K3.2 billion in an April 27 letter.
The letter was written in response to an April 8 order from President U Htin Kyaw. Phone Maw Shwe said he would hand over K500 million from Shwe Thukha immediately as a “first installment” and the remaining K2.7 billion by the end of July.
“Regarding to the return of the money/vehicles, U Kyi Tun, a chairman of Shwe Thukha … my representative will contact and implement the returning of the items,” he wrote.
Chief Minister Dr Aung Moe Nyo said it was unclear exactly which organisation Kyi Tun was affiliated with.
“We asked U Kyi Tun who he represents – the USDP, the foundation, the former government or Shwe Thukha – but he refused to answer,” Aung Moe Nyo said.
The USDP has responded to the allegations by declaring them a “political attack” and denying it received the K1.7 billion donation uncovered by police investigators.
It said in a statement it would take legal action against those spreading the allegations.