Kirin Holdings reported today that its audit of the financial and governance structures of its business partner in Myanmar failed to produce results. The independent assessment of Myanmar Economic Holdings Public Company Limited (MEHL) conducted by Deloitte Tohmatsu Financial Advisory was inconclusive as a result of Deloitte being unable to access sufficient information required to make a definitive determination on the destination of proceeds received by MEHL from the joint-venture businesses Myanmar Brewery Limited (MBL) and Mandalay Brewery Limited (MDL).
In the past, Kirin was heavily critized for its partnership with Myanmar’s abusive armed force. Human rights organizations including Human Rights Watch, Human Rights Now, Japan Volunteer International Center, and Shapla Neer said that the joint-venture in the two breweries provided the isolated Myanmar military with the much-needed foreign currency and helped the military to finance their apparatus of oppression.
In a letter to Kirin on May 22, 2020 Phil Robertson, deputy Asia director at Human Rights Watch said that ““Kirin is putting money right into the pockets of Myanmar’s military, which is responsible for countless atrocities against the Rohingya and other ethnic minorities. ”Kirin should repair its damaged reputation by disentangling itself from the Myanmar military’s business conglomerate and its abusive armed forces.” (inside.beer, 18.6.2020)
In November, Kirin announced to suspend all dividend payments of MBL and MDL and appointed Deloitte “to conduct an independent review of MEHL’s financial and governance structures to determine the destination of proceeds from the joint-venture businesses MBL and MDL as a matter of urgency.” (inside.beer, 11.11.2020)
In its statement today Kirin said “We have always been of the belief that we can contribute to efforts to address the social and environmental challenges that Myanmar faces through our involvement in the MBL and MDL beer businesses. At the same time, we have emphasized that it is wholly unacceptable for any proceeds from our Myanmar joint-ventures to be used for military purposes, which is the fundamental condition of the joint-venture agreement. Hence over the past year, we have initiated concrete steps to address the concerns from various stakeholders such as those in the United Nation’s Independent International Fact-Finding Mission on Myanmar report on the economic interests of the Myanmar military, and we remain committed to urgently finding a solution that is consistent with our approach so far.
“In the meantime, the suspension of the payment of dividends from MBL and MDL to Kirin and MEHPCL will continue to apply. As previously announced in November, this is due to the significant lack of visibility regarding the future business environment for our Myanmar joint-ventures, including the remaining issue of the destination of proceeds from MBL and MDL and the extended impact of the COVID-19 virus in Myanmar.
“The Kirin Group Human Rights Policy underpins our commitment to protect human rights within our business. Kirin takes its responsibilities in Myanmar seriously and will continue to take the necessary action to ensure its business activities in the country adhere to the highest standards. A further update on our plans will be provided by the end of April 2021.”