Myanmar Thilawa SEZ Holdings Ltd’s (MTSH) share prices fall in the wake of boardroom row, leading to the resignation of its Chief Operating Officer

Yangon-listed Thilawa SEZ Holding Ltd’s (MTSH) stock has seen a drop in share price as a row which engulfed its board directors brewed, leading to a resignation of its chief operating officer.

U Thein Han, a director of the company’s board, and chair U Win Aung argued openly among other directors at the fifth MTSH annual meeting at Myanmar Event Park on September 29. 

The day before, the share was at K2,950 dropping to K2,900 on October 2. “Such dispute at the annual general meeting shouldn’t have happened,”  said one of the board member who spoke on condition of anonymity.

The reason behind the internal dispute came from the chair’s reluctance to answer questions raised by shareholders at the annual meeting.

Myanmar Edible Oil Industrial Public Corporation Ltd (MEICO) asked about Dagon International Company Limited, which also happens to be owned by U Win Aung, about withdrawing more than K100 million from MTSH’s account in the fiscal year of 2013-14.

The money went to finance the cost of feasibility study to start the Thilawa Special Economic Zone (SEZ) which was previously financed by Japan Thilawa Development Company (MJTD). Both companies are collaborating on a joint venture project to operate the SEZ in southern Yangon.

The first study, however, didn’t satisfied MJTD which refused to pay for a second one, leaving MTSH to assume the costs. 

This problem was brought to light on an audit carried at that year. But only years later, in 2017-18, they were requested to solve it, said one of MTSH external audit team, describing the situation as “strange”. 

Disputes and resignation

Law Teck Wee, formerly CEO at MTSH, took the office computers that contained related facts about this deal out of the company area. The situation escalated and the board decided to open a case at Lanmadaw police station. 

At the last minute, the chair and some directors held an emergency meeting persuading everyone involved to withdraw the case. 

This motivated shareholder U Thet Tun to send the questions to solve this case at the annual meeting, but which remained unclarified. 

“We withdrew the case as we didn’t want to exaggerate. We are worried about the company image. And we withdrew as some cases should be solved only internally,” U Aung Soe Tha said.

The company remains largely ineffective in resolving their internal disputes and clarifying details of prior deals. These issues finally culminated out in the open, at the fifth annual MTSH meeting, which comes with a financial price for the company and shareholders. 

Following internal conflicts of interest issues, COO David Law submitted his resignation.

The company statement said Mr Law was allowed to resign for him to give more time to his personal matters but exact date of termination was not mentioned.

In the 2017-18 annual report given to shareholders at the fifth annual meeting, documents showed he was appointed as CEO at one of MTSH’s subsidiaries. As per the report, Mr Law’s designation is CEO of Thilawa Property Development (TPD) Ltd but his role in MTSH wasn’t stated.

(The Myanmar Times: https://www.mmtimes.com/news/mtshs-share-price-falls-wake-boardroom-row.html )

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