Poppy McPherson & Fanny Potkin

BANGKOK, (Reuters) – The M1 Group of Lebanon will work with a Myanmar company to acquire Telenor’s Southeast Asian business. Telenor was forced by the military junta to find a buyer locally. Three sources close the matter confirmed that the M1 Group and a Myanmar company would partner.

Telenor was one of the largest foreign investors in Myanmar. It announced in July that M1 Group would purchase its Myanmar operations for $105 million. The move is a retreat from a country which has fallen into chaos since a military coup last February.

As the junta puts pressure on the telecom and internet companies, it installs surveillance technology. It also bars high-ranking executives from leaving.

Late last year, military leaders rejected the sole sale to M1.

According to the sources, M1 Group was privately approved a partnership with Shwe Byain Phyu Group. Sources said Shwe Byain-Phyu would become the majority shareholder. Because of the sensitive nature the matter, they refused to be identified.

Shwe Byain Phyu consists of companies interested in mining gems and operating petrol stations. Thein Win Zw, its chairman, is also a director at Mahar Yoma Public Company. The company, which forms part of the consortium that owns a share in Mytel (military-owned telco), corporate records reveal. He has not responded to Reuters’s request to comment on the sale of Mytel and his connections with the military.

Reuters obtained an Oct order from Min Aung Hlaing, the office of the junta leader, instructing the Ministry of Transport and Communications officials to deny the sale of M1 Group. The company is owned by Najib Mikati, the Lebanese prime minister.

While the reason for the decision was not stated in the order, those familiar with it said the junta favors a local buyer.

Representatives of M1 Group, a Beirut-based company, didn’t immediately respond to Reuters calls seeking comments. Representatives of M1 Group, which is based in Beirut, did not immediately respond to Reuters’ requests for comment.

Telenor was not informed of the decision.

Telenor spokesperson said that it is still waiting to hear back from regulators on its request for approval for the sale. He declined further comment.

In November, Reuters reported that several Myanmar firms had expressed interest in buying Telenor Myanmar’s operations and that M1 had held talks with Shwe Byain Phyu about a partnership.

According to industry sources, both firms submitted a proposal for a merger in order to acquire Telenor. The merger was approved by the leadership of the junta a month later.

Sources said that the new venture would go by the name of “Atom.”

SURVEILLANCE CONCERNS

Telenor’s departure could increase the surveillance by the junta, activists have warned. The company is among four Myanmar operators of telecoms, along with Qatar’s Ooredoo state-backed MPT (which is partly owned by a military linked company) and Mytel.

Reuters found last year telecom and internet service providers had been secretly ordered in the months before the coup to install intercept technology that would allow the army to eavesdrop on the communications of citizens.

Telenor said in September it was pulling out of the country to avoid European Union sanctions after “continued pressure” from the junta to activate the technology.

The Assistance Association for Political Prisoners stated that Myanmar security forces had killed nearly 1,400 people since February 1st coup and have also arrested thousands in an effort to suppress resistance. Junta contests the death toll.

They claimed that widespread fraud was committed in the Nov 2020 election, which Aung San Suu Kyi led won with a clear majority. Local and international monitoring groups confirmed that there was no significant irregularity in the voting.

It has shut down mobile data in several areas, both nationally and regionally. This made it more difficult for protest organizers to organize. In July, it issued confidential orders preventing senior telecom executives from leaving without authorization.