This is one of my own pieces recently posted on our website Military-backed Myanmar conglomerate launches arbitration with F&N over brewery dispute Published on Thursday, 07 November 2013 14:30 The first Thai-Myanmar corporate dispute has emerged, with a Myanmar company going to court against Fraser & Neave—the Singapore-based company that is now owned by Thai tycoon Charoen Sirivadhanabhakdi. The case involves a brewery in Myanmar, formerly owned by Asia Pacific Brewery and later by F&N, which was taken over Charoen’s group early this year. Myanma Economic Holdings Limited (MEHL), a military-backed Myanmar conglomerate, confirmed on Wednesday that it has begun arbitration with Singapore-based Fraser and Neave Limited (F&N) over the Myanmar Brewery dispute. MEHL mentioned in a statement that it has a clear right under their joint venture agreement to buy F&N’s stake in Myanmar Brewery (MBL). “We are now going to arbitration after months of failing to resolve the situation bilaterally,” Myint Aung, deputy managing director of MEHL, was quoted as saying in the statement. Since MEHL exercised its rights to buy F&N’s stake in April of this year, several media reports have suggested that the dispute was a test case for Myanmar’s investment laws and that foreign investors should be concerned with the development. But MEHL has dismissed such analysis as “erroneous” politicisation. It also emphasises that the dispute will not affect foreign investment in Myanmar because it does not concern investment laws in Myanmar or how foreign investors are treated in the country. “We know it will serve the interest of some parties to politicise the dispute, but doing so does no justice to the case or to anyone interested in investing in Myanmar,” said Myint Aung. “We believe that allowing parties to exercise their contractual rights, including the right to arbitrate a dispute, will strengthen and not weaken foreign investors’ confidence in Myanmar.” MEHL, in a rare public statement, said that contractual rights should be protected, whether the aggrieved party is a foreign or local entity, private or state-owned. Myint Aung said that a joint venture agreement protected MEHL’s rights in the event of a default by F&N. “The arbitration speaks for our desire to adhere to proper and due process,” he said. MEHL said that it entered into a joint venture with Heineken through its Asian arm, Asia Pacific Breweries Limited (APB), in 1995 to set up MBL. Under the Agreement, MEHL was to own 45 percent of MBL’s shareholding and APB the balance of 55 percent. APB, however, transferred its shareholding to F&N in 1997. F&N held a 50-percent stake in APB. However, in December 2012, F&N divested its entire shareholding in APB. On January 30 of this year, TCC Assets Limited’s offer for all the shares in F&N turned unconditional, resulting in TCC Assets and its concert parties controlling more than 50 percent of F&N’s issued capital. On April 24, MEHL exercised its rights under the JV agreement to serve notice on F&N to sell its stake to MEHL or its nominee. It served notice of arbitration on September 9. In its statement to the Singapore exchange on August 29, F&N said that there is no basis to the claim, which would be vigorously resisted. “The matter is in the hands of the company’s lawyers,” F&N said in the statement. The dispute arose earlier this year after total control of F&N went to Thai billionaire Charoen Sirivadhahabhakdi, owner of Thai Beverage, one of the largest beverage makers in Southeast Asia. Reported by Khine Lin Kyaw elevenmyanmar/business/3979-military-backed-myanmar-conglomerate-launches-arbitration-with-f-n-over-brewery-dispute
Posted on: Thu, 07 Nov 2013 09:07:16 +0000
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