This document summarizes corporate governance and disclosure requirements for companies in Myanmar. It discusses what corporate governance is and provides an overview of the key drivers improving it in Myanmar, including investor demand, new regulations like the 2017 Companies Law, and international support initiatives. The document outlines directors' duties under the Companies Law and when companies must disclose information according to the law and the Securities Exchange Commission. It also explains concepts like beneficial ownership and politically exposed persons. Finally, it discusses anti-corruption guidelines for companies and the results of MCRB's corporate transparency assessment.

1. Developments in Corporate
Governance and Disclosure for
Companies in Myanmar
Vicky Bowman
Hong Kong Chamber of Commerce
6 February 2020

2. Corporate Governance
 “The mechanisms, processes and relations by which corporations are controlled
and directed”
 Rights and responsibilities, rules and procedures for decision-making
 Setting objectives in the context of the regulatory/market/social environment
 Monitoring the actions, policies, practices, and decisions of corporations,
their agents, and affected stakeholders.
 A corporation is an organization, usually a group of people or a company,
authorized to act as a single entity (‘legal person’) and recognized as such in
law.
 Business
 State-owned enterprise
 NGO or charity
2
က ော်ပိုရတော်
အိုပော်ခ ျုပော်မှု

3. What is driving improvements in corporate governance and
disclosure in Myanmar?
 Investor demand – private equity, business and JV partners/due diligence,
 Regulation:
 2017 Companies Law
 Directors’ Duties, requirement for audited financial statements (except small companies) etc
 Central Bank of Myanmar Directives including non-exec directors, beneficial ownership
 Securities and Exchange Commission of Myanmar (SECM)
 Environmental and Social Impact Assessment
 Extractives Industries Transparency Initiative
 International support (particularly UK/Australia):
 IFC – CG Scorecard, translation of resources
 Myanmar Institute of Directors
 OECD (Japan-supported) to support Myanmar CG Code
 Stakeholder pressure - MCRB’s Pwint Thit Sa/Transparency in Myanmar Enterprises report; UN FFM report,
donations
3

4. Myanmar Companies Law: Directors Duties
 2017 Myanmar Companies Law (MCL) (replaced 1914 Companies Act)
 Unlike 1914 Act, 2017 MCL has more detailed provisions on duties and responsibilities
of directors: focus on fiduciary duty to company:
 care and diligence
 act in good faith, in companies best interests;
 disclosure of material interests
 Directors do not have to be shareholders/owners and owners do not have to be
directors’; must be >18 and of sound mind.
 Independent Directors mentioned for first time in MCL; DICA may issue notifications,
rights and duties of independent director, but haven’t yet
 Directors must not miss three consecutive Board meetings; or all meetings for three
months (whichever is longer) without leave or alternate
 MMK10 million fine (or more if dishonest) – unless in good faith and relied on
professional expert opinion

5. When are companies required to disclose
information?
 Myanmar Investment Law/Rules requires annual reports for projects with MIC Permits (Rule
196/199)
 Environmental Impact Assessment disclosure
 Disclosure requirements from Central Bank of Myanmar for banks
 Myanmar Companies Law requires every public company to circulate a statutory ‘Directors report’
to every ‘member’ (shareholder) of the company (S.148(a) and (b), certified by at least two
directors. It must include:
(i) a fair review of the company’s business, including a description of the company’s primary
business
(ii) an analysis of the company’s performance during the year,
(iii) a description of risks and uncertainties facing the company and
(iv) any other matters which may be prescribed’.
 The report must be sent to the Registrar i.e. DICA (s148e)
 All reports sent to the Registrar are to be publicly available on payment of a 10,000 kyats fee per
company
5

6. SECM disclosure obligations for public companies in
Myanmar
 Securities and Exchange Commission Notification 1/2016 on ‘continuous disclosure’
requires
 Companies listed on the Yangon Stock Exchange
 Public companies which are traded ‘over the counter’ or have SECM approval to
raise a public offering
 Public companies with > 100 shareholders
 To submit:
 Annual reports
 Half-yearly reports
 Extraordinary reports e.g. change of CEO
 And to publish them on the company and SECM website
More details in Pwint Thit Sa pp 26-27 EN and pp 38-40 MM

8. What is the difference between beneficial ownership and legal
ownership?
Beneficial owner refers to the natural person(s) who
ultimately owns or controls a customer (company) and/or
the natural person on whose behalf a transaction is being
conducted. It also includes those persons who exercise
ultimate effective control over a legal person or
arrangement.
Definition from Financial Action Task Force, OECD
Usual international threshold for declaration is 25% control
• 25% in 2015 Myanmar Anti-Money Laundering rules
• 20% in CBM Directive 18/2019
• 5% in MEITI for extractives companies
• 5% in DICA Directive 17/2019 (requires clarification)

9. Six Legal Owners of Air KBZ
Natural Person Shareholding Percent
AUNG KO WIN 1360 17%
NANG KHAM NOUNG 1360 17%
NANG LANG KHAM 1360 17%
AUNG AUNG ZAW 3520 44%
BO BO ZAW 400 2.5%
YAR ZAR PHYO WAI HTUN 400 2.5%
– according to MyCo filings

10. Beneficial Owners
If Air KBZ filed a beneficial ownership (BO) declaration with DICA, based on a 25%
threshold, and treated legal ownership as the same as BO, this would exclude mention of
any member of the KBZ family, as each has a 17% shareholding. Yet the family acting
together has majority control (51%).
Taking into account normal family-owned business arrangements in Myanmar, MCRB
would therefore expect them to identify two Beneficial Owners i.e. those who are ‘exercising
ultimate effective control over a legal person or arrangement’.
Aung Ko Win (KBZ)
Father of Nang Kham Noung and Nang Lang Kham, so total shareholding for family
members, who are presumed to act together giving 51% control
Aung Aung Zaw (24 Hours Company)
44% Legal and Beneficial Ownership or, if also able to exercise control over Bo Bo Zaw
and Yar Zaw Phyo Wai Htun, 49% control

11. Politically Exposed Person definition in
MEITI
myanmareiti.org/sites/myanmareiti.org/files/publication_docs/the_myanmar_beneficial_ownership_taskforce_and_the_myanmarupdated_pep.pdf

14. Anti-Corruption Commission
Notification 14/2018: Eight principles for company anti-corruption codes of conduct
a) Strong, effective policy and support from top-level management to fight corruption
b) Risk assessment to effectively identify and evaluate exposure to corruption
c) Enhanced and detailed measures for high-risk and vulnerable areas
d) Application of anti-Myanmar Government ‘s notification
corruption measures to business partners
e) Accurate books and accounting records
f) Human resource management policies complementary to anti-corruption measures
g) Establish trustworthy reporting mechanisms to report suspected corrupt behavior.
h) Periodic review and evaluation of anticorruption prevention measures.

15. 2%
22%
65%
11%
Listed Companies (5) Public Companies (55)
Private Companies (160) State-owned (28)
248
MCRB’s Pwint Thit Sa Report

16. Pwint Thit Sa 2019 results

17. The scorecard structure remains similar
18
33%
16%25%
26%
Corporate governance Corporate profile
Reporting Sustainability management
PTS 2019
Structure
We will use 143 criteria and 97 questions.
Compared to last year?
• We removed 3 criteria
• We added 4 new criteria: corporate
policies, donations
• We updated 42 criteria
Bonus points for privately owned
companies who go beyond what they have
to disclose by law
Sliding scale scoring (0, 0.5, 1,2) which
rewards genuine implementation, not
‘greenwashing’
30%
14%
28%
28%
PTS 2020
Structure

18. Where to get more information about
corporate governance
Read
 DICA website
 IFC publications in EN and MM
 Pwint Thit Sa report – explains
Myanmar regulations on
disclosure
Join
 Myanmar Institute of
Directors
 Myanmar Business
Coalition on Gender
Equality