Dear Sir/Madam

My name is Arvind Lakshmikumar. I am the CEO of Tonbo Imaging and am writing this email in response to your email and draft report below.

The report alleges that Tonbo Imaging's thermal weapon sight (EK) has been supplied to Myanmar. I would like to confirm that this information is incorrect and we have not sold any thermal sights to Myanmar or to customers who supply to Myanmar.

In response to your questions:

1. How have your products/services ended up at KaPaSa factories for the manufacturing of weapons in Myanmar?

Tonbo's products have not been sold to KaPaSa factories or to any of their suppliers.

2. What, if any, export control permits have you obtained for the export of the products / services identified in the report?

Every product of Tonbo, if identified as military or dual use, undergoes an export clearance process that is governed by SCOMET (under the Ministry of India export process). All products are exported only after we obtain a SCOMET license. The SCOMET license requires a clear traceability of both the consignee and the end user.

3. What are your current due diligence practices to identify and assess the human rights impacts of your products / services, especially when they are used in conflict-affected areas such as Myanmar?

We understand the problems caused by human rights violations in Myanmar and other conflict ridden areas. Tonbo Imaging does not sell to countries that engage in this and/or are under sanctions by the Govt. of India/United Nations.

4. What actions have you taken, or do you intend to take, to address the risk that your products / services end up in use by the Myanmar DDI for manufacturing of weapons?

Specifically, what are the contractual and technological means available to you, and
with regard to the leverage you can exert over dealers, agents, and others with whom
you have a business relationships, to address the findings in SAC-M’s report and how
do you intend to make use of such measures?

Any export by Tonbo undergoes a SCOMET clearance process that is vetted by the Government of India through a multi-level approval process. The SCOMET application lays out the sales chain including consignees, systems integrators and end users. If this chain has any sanctioned entities, a SCOMET approval is denied.

5. What are your public commitments to respect human rights and create robust human
rights due diligence policies and processes connected with the use of your products and services, including via your business relationships?

Like any responsible business, we respect and adhere to the laws of the land. Tonbo Imaging's products are used by customers worldwide and they protect and safeguard soldiers and homeland security defenders. We don't make weapons. The nature of the products (sights, observation devices) are for use by military and paramilitary personnel. The steps we take to ensure that these products are not sold into the wrong hands are:

1. Identification of the end user
2. KYC of the distributor/systems integrator
3. End user undertaking of the use of the product
4. Documentary evidence submitted to our Government for their due diligence

6. How do you consult with stakeholders in relation to the actual and potential human rights risks arising from your activities and from the activities of those with whom you have business relationships?

Tonbo sells only to customers where there is no/minimal risk of any violations. Given that we are a small company with limited legal resources for diligence, we rely on the due diligence and KYC process that is done by SCOMET and undertaken by the Government of India for final approvals. We carry out our own diligence by engagement with the customers and their end users.

We appreciate the work that is being done by SAC and would like to assure you that Tonbo Imaging follows all due diligence and approval processes before we make any sale to any customer. In the context of Myanmar, we reiterate that the information that you have been provided is incorrect and Tonbo has not made sales of Thermal weapon sights to any customer/distributor in Myanmar as identified by your report.

If you need any clarifications, please feel free to contact me directly.

regards,
Arvind

Dear Sir or Madam,

With reference to your below mail dated 10^th Jan. 2023, we would like to inform you that Fritz Werner stopped its activities in weapons manufacturing a long time ago.

In the very distant past Fritz Werner (a former state-owned company) has supplied products and services to Myanmar within the given legal framework and export permits that had been issued by the German government at that time. However due to the developments in Myanmar Fritz Werner Industrie-Ausrüstungen GmbH stopped all activities in Myanmar more than 20 years ago.

Best regards,

Fritz Werner Industrie-Ausrüstungen GmbH

To whom it may concern:   

In SAC-M’s recent report, ‘Fatal Business: Supplying the Myanmar Military’s Weapon Production’, it contains a large amount of false and misleading information on Mottama Holdings’ and U Yan Hoe’s involvement with the military that gravely affects our reputation and our standing in the business community.

We have no relationship with the military regime, its affiliates, or any of its associates. There has been no proposal or engagement to the military or its associates that were authorized by any of our companies, any authorized individual representing Mottama Holdings or any of our associates. We kindly request that any mention of Mottama Holdings and U Yan Hoe (the correct spelling is U Yang Ho) be removed from the report as soon as possible.   

The report meticulously cites each of the sources and seeks to provide transparency and clarity to its readers. However, on all information regarding Mottama Holdings, the report’s sole source is an “individual formerly associated with Myanmar’s armed forces.” None of the alleged connections in the report with Mottama Holdings are true and are not verified by any other organization but the individual who has voluntarily given SAC-M this information. Whomever provided SAC-M this information is intentionally or unintentionally slandering Mottama Holdings’ and all its associates’ reputation.

We respectfully request that you uphold high standards of publishing and fact-checking both before, and continually after, distributing this report. We cannot measure the harm that this report will cause us and has already caused, but we hope that you will take the time to review your report and consider retracting your statements on Mottama Holdings.    

We submit this appeal because this is unjust and unfair for an unfounded designation impacting our company, our reputation in the business community, our safety & security (there have been multiple attempts in Myanmar to assassinate individuals believed to be associated with the military), our shareholders, our associates, our friends, and finally, our more than 2000 employees who are relying on us. It is not fair to them to have their association and relation with the company stained by claims that are untrue and unsubstantiated.    

For your reference, the following is the information that needs to be removed and our reason for each of the removal.    

Again, I hereby kindly request for SAC-M to retract all statements in the report that pertain to Mottama Holdings without delay, before local media or other news agencies reproduces the erroneous allegations regarding our company’s alleged connections with the military, which are based on unfounded assumptions and false information. In making its vital and impactful decisions, SAC-M clearly must not be perceived to rely purely on circumstantial evidence and rumor without any firm evidence and, as we lay out in our appeal here, we have been included in the report without any firm evidence. We hope that any issues caused by this report to Mottama Holdings be acknowledged and addressed, but we reserve the right to seek appropriate compensation for any material damage or harm that may have occurred.    

Please do not hesitate to let us know if we can be of further assistance.    

Thank you.   

Each of the below are paraphrased and the page numbers of these claims are referenced:   

[Page 8, 40, 62, 64, 65, 74] Functioning as the intermediary between NORINCO and the Myanmar military’s Directorate of Defence Industries (DDI) and U Yan Hoe (the correct spelling is U Yang Ho), the Chairman of Mottama Holdings Limited, replaced the former NORINCO agent Dr. Tun Min Latt.

U Yang Ho, the Chairman of Mottama Holdings Limited and Mottama Holdings are both not acting as an intermediary between NORINCO and/or the Directorate of Defence Industries (DDI) in any way. All claims that refer to U Yang Ho or Mottama Holdings as an “agent” or “intermediary” are unfounded and untrue.    

The only provided source is an unverified information from “Individuals formerly associated with Myanmar’s armed forces.” In particular, on Pg. 8 of the report, it states clearly that “… individuals formerly associated with Myanmar’s armed forces” merely “suggests that…”, which demonstrates that the source only offered an assumption, not information or verified fact.   

[Page 65] Mottama Holdings facilitates the DDI’s purchases of raw materials, including steel, for arms manufacturing.   Mottama Holdings has a company that imports, and trades construction required finished steel products (i.e. rebar, H-beam, concrete) to Myanmar, but does not supply the DDI or further provide it “for arms manufacturing.”   Again, the only provided source is an unverified “Individual formerly associated with Myanmar’s armed forces”.    

[Page 57] Mottama Holdings routinely facilitated for the shipments to Taiwan for the performance of critical maintenance of the CNC machines for firearms for DDI, including those manufactured by GFM Steyr.  And is the importer for the DDI of high precision CNC machines from DMG MORI. Mottama Holdings has no affiliation, transaction, communication or any other form of association with GFM Steyr or DMG MORI. Here the provided citation is unclear at best, “according to information received…”, which could be the “…information received by SAC-M in November 2022” mentioned on Pg. 49 and 65, of which is provided by, again, the unverified information from “Individual formerly associated with Myanmar’s armed forces”    

[Page 48, 49, 66] U Sitt Taing Aung is listed as representing Mottama Holdings Limited at the B2B forum in Prague in June 2019, where he requested to meet Czech companies with skills in steel manufacturing for the defense industry. Mottama Holdings Limited only engaged U Sitt Taing Aung for the sole purpose to represent Mottama Holdings at the B2B forum (invite-only) that he was invited to, to represent Mottama Holdings as a construction, construction material trading, and real estate developing company. Other requests made are not authorized by Mottama Holdings and do not hold any representation of Mottama Holdings’ wishes or of Mottama Holdings’ “request”.   

[Page 49, 65, 74] Until 2013, Mottama Holdings was known as Asia Metal Company which was sanctioned for its alleged involvement in weapon deals between Myanmar and North Korea. Asia Metal Company was sanctioned by the US in 2013 for constructing buildings and supplying construction materials for a DDI factory.   Mottama Holdings is not the same company as Asia Metal Company. From our understanding, Asia Metal Company was sanctioned by the US in 2013 and was later removed from the sanction list.    

This information is misleading and provides the reader circumstantial evidence that Mottama Holdings was sanctioned before. Mottama Holdings and its Chairman, U Yang Ho has never been sanctioned.   

[Page 75] Life and Challenge Co., Ltd reportedly assists Mottama Holdings, and the DDI, with CNC machinery support services, including for shipment to and from Taiwan for maintenance and repairs. Mottama Holdings has no affiliation, transaction, communication or any other form of association with Life and Challenge Co., Ltd. Again, the only provided source is an unverified information from “Individuals formerly associated with Myanmar’s armed forces.”   

We extend our gratitude and anticipate a prompt response from you.   

Thank you.

To whom it may concern:

We are writing further to our correspondence with SAC-M regarding its recent report, "Fatal Business: Supplying the Myanmar Military's Weapon Production."

The report's authors did not reach out to us for input, but we have taken the initiative to compile all the information that demonstrates that the allegations made in the report regarding Mottama Holdings' and U Yan Ho's involvement with the Myanmar Directorate of Defense Industries (DDI) are false.

First, we reiterate that we have no relationship with the DDI, its affiliates, or any of its associates. No proposal or engagement with the DDI or its associates has ever been authorized by any of our companies, any authorized individual representing Mottama Holdings or any of our associates.

We own a total of 28 Computer Numerical Control (CNC) machines that we purchased for our steel manufacturing factories. These machines are exclusively used for civilian manufacturing purposes such as plate cutting, drilling, punching, shearing, bandsaw, coping, beveling, and folding iron sheets. All of these machines were imported with proper import licenses, and we have all the necessary documents including invoices and other relevant paperwork to prove it.

The origin of our CNC machines is from reputable suppliers of industrial machinery in Italy, Taiwan, and Japan with whom we have had a long-standing relationship. The brand names of these machines are AMG, FICEP, SUNRISE, DAITO, TOONGWOEI and Centre Line.

These machines are fully accounted for, being in our possession. They are in use at the following locations: 13 of these machines are currently stationed at our factory located at N0.88, Industrial Zone (4), Shwe Pyi Thar Township, Yangon; 6 of these machines are located at No. 74/75/76/77/78/91, Kanaung Min Thar Gyi Street, Industrial Zone (4), Shwe Pyi Thar Township, Yangon; the remaining 9 machines are located at No. 106, Bayintnaung Road, Industrial Zone (4), Shwe Pyi Thar Township. Yangon. They are not capable of the military use ascribed to them in SAC-M’s report.

Please refer to our attached excel sheet for detailed information on our CNC machines, including photos of the machines in operation. We would be happy to provide access to our factory for an inspection, should you require it.

With regards to your allegations regarding Norinco, the only transaction that we have ever made with this company was to purchase facade lighting for one of our development projects, M Tower. The agreement for this was signed between Norinco New Energy Co., Ltd and Mindhama Co., Ltd, one of our subsidiaries. As reference, we have included a link for a video of the façade lighting work Click here. This was our only purchase from Norinco. We have had no dealings with that company since it was placed under United States sanctions in 2019. We understand the importance of providing accurate and transparent information and we are committed to ensuring transparency and accuracy in all matters related to our business practices. We assure you that we have strict policies in place to ensure compliance with all regulations and ethical standards.

In a previous interview conducted by BBC Burmese, featuring two of your members, Mr. Marzuki Darusman, and Mr. Chris Sidoti, that was aired at 8 AM Myanmar time, on 21 January, it was stated that SAC-M had reached out to the companies mentioned in the report prior to its release. We were surprised to hear this claim because Mottama Holdings received no such request to respond to the allegations made in the report. We would have responded fully if asked to do so and regard the report’s failure to undertake this basic requirement for gathering and testing the veracity of information to be deeply troubling.

Given the information we have now supplied which demonstrates that the claims made about Mottama Holdings are without foundation, I hereby request that SAC-M retracts all statements in the report, and which relate to the report concerning Mottama Holdings without delay, before local media or other news agencies reproduces the erroneous allegations regarding our company’s alleged connections with the military, which are based on unfounded assumptions and false information. In making its vital and impactful decisions, SAC-M clearly must not be perceived to rely purely on circumstantial evidence and rumor without any firm evidence.

We submit this appeal because this is unjust and unfair for an unfounded designation impacting our company, our reputation in the business community, our safety & security (there have been multiple attempts in Myanmar to assassinate individuals believed to be associated with the military), our shareholders, our associates, our friends, and finally, our more than 2,000 employees who are relying on us. It is not fair to them to have their association and relation with the company stained by claims that are untrue and unsubstantiated.

We hope that you will acknowledge and address the harm caused by this report to Mottama Holdings without delay. Please do not hesitate to let us know if we can be of further assistance.

Thank you.

Attached document: CNC Machines Details

*SAC-M has tried but failed in its repeated attempts to have dialogue with Mottama Holdings. It sought to respond to Mottama Holdings communications of 17 January and 25 January through the email address used to contact SAC-M in those communications, as well as through email addresses for Mottama Holdings’ subsidiary companies. All SAC-M responses either failed to deliver or were not responded to. This open letter is SAC-M’s response to those communications. It  asks further questions for Mottama Holdings.

To Mottama Holdings and the Mottama Group,

The Special Advisory Council for Myanmar (SAC-M) thanks you for your communications of 17 and 25 January in response to our letter of 15 January to you in relation to the findings of our recent report “Fatal Business: Supplying the Myanmar Military’s Weapon Production”. We have made repeated attempts, all unsuccessful, to contact you following receipt of your communications. We are now responding through this open letter.

As the report made clear, reliable sources suggest that your Group and its staff play important roles in the arms manufacturing industry in Myanmar by exploring business opportunities and brokering deals for the Myanmar Directorate of Defence Industries (DDI).

The report also noted that:

The DDI’s efforts to strengthen the domestic production of steel for arms manufacturing is also demonstrated by the participation of representatives of the Myanmar-based company Suntac Technologies (also known as Suntac Group of Companies) at the Myanmar-Czech Republic’s B2B dialogue in Prague in the Czech Republic in June 2019. According to the list of participants and meeting requests for this dialogue, focusing on strengthening economic links and business opportunities, the two Suntac Technologies representatives – U Sitt Taing Aung, the owner of the company and current president of Myanmar’s steel association, as well as managing director Ye Phone Hlaing – describe their company’s business products as, among other, steel pipes, steel plates, sheets and coil. For the 2019 visit to the Czech Republic, the company representatives specifically requested to meet potential partners in the Czech Republic with expertise in steel manufacturing and the defense sector. Of particular interest is also the fact that, according to the information provided for the meeting requests, U Sitt Taing Aung is listed as also representing Mottama Holdings Limited. (emphasis added)

A report by the UN Special Rapporteur on the situation of human rights in Myanmar on Myanmar's weapon manufacturing industry, published on 17 May 2023, also identified Min Dharma Steel Structures, a sub-company of Mottama Holdings, as playing a key role in the steel supply chain.

We therefore ask you to elaborate on what your business relationship is with U Sitt Taing Aung, a well-known arms broker for Myanmar’s military, and what interest you have in military-grade steel manufacturing.

Our report notes that Asia Metal Company, the predecessor to Mottama Holdings, "was subject to sanctions by the US in 2013 for constructing buildings and supplying construction materials for a DDI factory”. In your 25 January letter to SAC-M, you say that Asia Metal Company and Mottama Holdings are not the same company. Media reporting from 2018 (here and here) and Myanmar corporate records show that Mottama Holdings used to be called Asia Metal. We also note that, according to the Bizsouthasia website, Asia Metal Co. Ltd appears with the following email address: mottamaholdings.com – we include a screenshot for ease of reference.

Furthermore, according to opencorporates.com, as of 2004, the managing director of Asia Metal Trading Co. Ltd was U Yang Ho, the current chairman of Mottama Holdings Limited.

According to a profile on U Yang Ho by the Irrawaddy published on 28 June 2023,

[U Yang Ho] established Asia Metal Company (AMC), the predecessor of Mottama Holdings, in 1997 as a venture with five other businessmen… AMC changed its name to Mottama Holdings in 2013. Some stakeholders quit AMC to establish their own companies.

In your 25 January letter, you state that Mottama has “no relationship with the DDI, its affiliates, or any of its associates. No proposal or engagement with the DDI or its associates has ever been authorized by any of our companies, any authorized individual representing Mottama Holdings or any of our associates.” In addition to the findings of SAC-M’s report, a Myanmar military defector was quoted in the Irrawaddy on 28 June 2023 as saying,

If Ka Pa Sa is to build a factory, it is always Yang Ho who wins the contract. The budget is not limited in building those factories. And auditing is also not allowed.

We therefore ask you to elaborate on the extent of the business relationship between Mottama chairman U Yang Ho and the DDI, particularly as it relates to the construction of buildings for, and the supply of building materials to, the DDI.

Also in your 25 January letter, you further state that Mottama Holdings was not given an opportunity to respond to SAC-M’s report before its findings were made public. In fact, SAC-M sent a copy of the report to Mottama Holdings through the company email address on 15 January, inviting you to respond, but we received no response.

Our report dealt in part with Mottama’s CNC machines. You have provided a list purporting to disclose the locations of, and designated usages for, all of the CNC machines in Mottama’s possession, including photos of the machines in operation. This list does not contradict the findings of our report, particularly as it relates to Mottama’s role in procuring CNC machines for the DDI and assisting the DDI in obtaining critical maintenance for its machines.

Under international standards on business and human rights (including, but not limited to, the United Nations Guiding Principles on Business and Human Rights), companies such as Mottama Holdings have a responsibility to respect human rights. At a bare minimum, this means adopting a public human rights policy that relates to end-use of products and that is communicated both internally to company staff and externally to business partners (State authorities and companies inclusive). In addition, international standards on business and human rights require companies to conduct due diligence, independently of State authorities’ due diligence and know-your-customer practice, on the potential human rights impacts associated with the end-use of products and services. Due diligence is required to be undertaken prior to the investment layouts of the project.

SAC-M will provide any additional advice or respond to any further questions you may have on how to establish a robust human rights policy and due diligence process that covers the entire value chain spectrum.

We hope very much that, through this open letter, we are successful at last in responding to your communications directly to you. We would welcome your answers to the questions we pose.