Yangon rice market reels from fraud case

Workers prepare rice for export in Oct. 2017. Photo: MOI
Workers prepare rice for export in Oct. 2017. Photo: MOI

A multi-billion-kyat case of rice export fraud has grown over the last two weeks and damaged dozens of rice traders’ ability to do business.

The case against Aung Swe Oo began on Jan. 6 when 64 rice merchants operating out of the Bayinnaung Market in northwestern Yangon filed complaints alleging that they were cheated out of a total of K5.37 billion (US$3.9 million). They said Aung Swe Oo and his company ASO accepted their money without delivering the rice he said he was selling.

Since then, more claims against Aung Swe Oo have emerged, bringing the total value of the alleged fraud up to K5.64 billion ($4.1 million). Each of the merchants claims a loss of between K10 million ($7,300) and K800 million ($587,000).

The Myanmar Rice Traders Association has accepted the alleged victims’ complaints and set out to resolve the case providing them with legal assistance and confiscating ASO-owned property to pay them back. However, the association has faced challenges along the way.

“While confiscating the scamster’s properties, we had to face a series of problems related to the lease and mortgage. The merchants, rice millers, and farmers who are victims of the fraud are approaching the depot daily to raise complaints. It will take time to settle this problem. We will not be able to placate all the fraud victims,” association secretary Than Oo told the Global New Light of Myanmar.

Aung Swe Oo faces two criminal charges, and police are expected to file a third charge against him.

The Immigration Department has reported that relatives of the suspect left Myanmar on Jan. 2 and 5, just before the first complaints were filed, but there is no record of Aung Swe Oo himself leaving the country.

As authorities search for the alleged fraudster, Yangon’s rice industry has been reeling from the magnitude of the case. Rice exporters have been avoiding Yangon markets and buying from rural markets instead. The price of Myanmar rice has also risen.

“Rural merchants are worried because of the case, which has triggered mistrust among Yangon merchants. As a result, rice inflow into the Yangon market is declining,” Than Oo said.

The Myanmar Rice Traders Association has reported that rice shipments may be delayed, potentially harming Myanmar’s international trade relations. To avoid future fraud cases, the association has advised rice traders to avoid advance purchases and sales.

The Myanmar Rice Federation, a government-backed regulatory body, is expected to report the case to the ministries of commerce and home affairs in an effort to bring Aung Swe Oo to justice and reach a settlement with the alleged victims.

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