India's Adani Ports said on Wednesday it was abandoning plans to build a container terminal in Myanmar, weeks after applying for a U.S. licence for the project, saying it believed it did not violate sanctions.
A military coup in Myanmar in February and an ensuing crackdown on mass protests in which hundreds have been killed has drawn international condemnation and sanctions on military figures and military-controlled entities.
"The company's risk management committee, after a review of the situation, has decided to work on a plan on exiting the company's investment in Myanmar, including exploring any divestment opportunities," Adani said in a statement, without giving further reasons for the change in plan.
The company is expected to fully exit the investment in the strife-torn south Asian nation between March and June next year, it said.
The ports operator said in August it had asked the United States' Office of Foreign Assets Control (OFAC) for a licence to operate the Myanmar container terminal.
Adani had said in May it would abandon a Myanmar container terminal project and write down the investment if found to be in violation of U.S. sanctions.
The company had invested $127 million, including a $90 million upfront payment for leasing land, it said in May, adding a write-down would not have a material impact as the project accounts for only about 1.3 percent of the company's total assets.
Adani last year won the bid to build and operate Yangon International Terminal, which it has said is an independent project fully owned and developed by the company.
A March report released by two rights groups cited documents purporting to show that an Adani unit would pay up to $30 million in land lease fees for the project to the Myanmar Economic Corporation (MEC), one of two military-controlled conglomerates under U.S. sanctions.
Adani did not comment on the lease payments detailed in the report at the time, but later said it had a "zero-tolerance policy on sanctions."
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today