Microsoft has stepped into the precarious business world of supposedly democratic Myanmar by signing a deal with a conglomerate whose founder has long battled claims of involvement in the narcotics trade.
The US giant is due to reveal a software and services agreement with the Shwe Taung Group, whose controlling shareholder, Aik Htun, was once suspected by the US Treasury of “having connections with the narcotics trade”.
Aik Htun blamed the allegations on misinformation and jealousy amid the secretive atmosphere of military rule.
Microsoft’s controversial move, along with difficulties faced by Caterpillar to Coca-Cola, highlight the problems facing multinationals as they try to dodge US sanctions and carry out due diligence on Myanmar’s potential business partners.
The Microsoft deal is being seen as the first of many foreign partnerships made in the wake of Aung San Suu Kyi and her National League for Democracy’s landslide victory at the November 8 election.
Microsoft claimed it had a “formal process of due diligence that includes verifying our customers against the relevant local as well as US laws and regulations”.
The tech giant said the Shwe Taung deal for an undisclosed fee was only its second-largest Myanmar agreement, after inking a similar system upgrade agreement in September with the Kanbawza Group, a gems and banking conglomerate.
Kanbawza has also attracted criticism for its links to Myanmar’s deadly jade industry. The company denied any wrongdoing.
Chairman Aung Ko Win was on an EU sanctions list for having alleged ties to the former junta. The list was cancelled after the generals handed power to a quasi-civilian government in 2011, itself dominated by former generals.
Many Myanmar firms are seeking to improve their IT now sanctions are being lifted and mobile phone networks are traversing the country.
Offering a little context to the accusations of involvement with the jade trade, police in northern Myanmar said they had abandoned efforts to find the bodies of up to 200 jade miners buried when a slagheap collapsed.
The 60-metre heap of dirt and discarded rocks flattened around 70 huts, burying migrant miners and their families as they slept.
Rescuers recovered 114 bodies following the landslide in Hpakant in Kachin State.
Many of the dead were scavenging who made a living looking for scraps of jade in the heaps of debris left behind by the mining companies.
The military-dominated jade trade generates many millions of dollars, a sizeable slice of Myanmar’s GDP, largely through sales to China.
“We just don’t know how many people exactly were buried since we don’t have any data on people living there,” said Tin Swe Myint, administrative head of Hpakant Township. “It was just a slum with these … workers living in makeshift tents.”