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May 28, 1996

In mid April ( 15-16/4 ), Khun Sa's second son Zao zarm Hurng ( who has taken
over the responsibility from Khun Sa and Fah Lang to see that the remaining
1,600 ex-members of the MTA and 300 disabled soldiers still have their monthly
allowance of rice and money ), who had gone to Rangoon to see his father
returned to Ho Murng. He had gone to see his father with the hope of getting
some of the business concessions or contracts such as for timber, mining, gems,
gem factories, road construction, etc.which they had asked from SLORC generals.
But Zao Zarm Hurng said that he had waited in vain for over a month without
gaining anything as yet. SLORC officials kept on telling him to wait a little
more and if urged they would suggest him to go to so and so person or to apply
at this or that office. It had been a waste of time, he said, and the only
worthwhile thing was that he had the opportunity to visit Mandalay, the gem
mines of Murng Su, Murng Kut ( Mokok ) and jade mines of Phar Karnt and Ta Mark

But, in his speech to some remaining 7-8 officers and military trainers, he
urged them not to lose heart, and not to trust any rumors and go away. He said
that he had arranged to ask the SLORC Division Commander of Ho Murng for
permission to open up factories to make chopsticks, toothpicks, paper,
limestones etc. And if they were not permitted to do this, they would go to work
in gem mines in a group.

When Zarm Hurng went to see him, Khun Sa was staying at a small house on an
island in Inyar Lake.

Since February, most of the former MTA officials who are Chinese nationals (
Khun Sa's men of the original SUA ) have moved to live in Burma proper. They did
not want to live in Ho Murng nor dare to live in Shan State, as if they were
afraid of Karn Yord's group, SSNA, or others. ( There has been widely spread
news that Shan soldiers often rob and kill Chinese nationals. ) When they left
Ho Murng in 3-4 groups, though safe in their own cars, they dared not leave
until there were 7-8 cars to form a group.

Gem cutting machines and equipment which Khun Sa's men had taken to Taunggyi are
being piled there ( at the newly expanded quarter called Myo Thit ). There is
still no place to use them.

Khun Seng, Khun Sa's uncle, and a group of Loi Maw Chinese, consisting of 10
households, have gone to live in Rangoon at an extended V.I.P quarter called
Shwe Pyi Than Myo Thit. Some have gone to buy or rent houses and live at Sein
Mya Karn Thar quarter in the outskirts of Rangoon. Khun Seng and Fah Lang (
former chief of Staff of MTA ) can rent house and live freely, not like Khun Sa
who is under the control of the MI. Khun Seng is said to be trying to set up a
brick factory on the road to Mingaladon. Of the gem mining concessions they have
requested, SLORC have granted them 10 plots at Phar Karnt jade mine and 10 plots
at Murng Kut ( Mokok ) ruby mine ( nothing has been heard about Murng Su ruby
mine ). But the granted plots are places which are not wanted by others and they
would have to go and choose by themselves.

Contracts which Khun Sa and his group have been granted and are in the process
of registering are trading companies ( tranportation, gem mining, ore mining )
etc. They are looking for places in Pegu, Mandalay and Lashio to open up
branches. Timber and road construction contracts have not been given to them but
to Lo Shin Han ( former famous opium warlord ) and his group in association with
other 5 companies. They have been given the contract to build, repair and
improve roads from Mandylay to Muse.

At the moment the Khun Sa and Khun Seng group does not look very financially
( perhaps because they have not yet drawn enough money from their bank accounts
in Thailand ). In early May, a man from Ho Murng ( a reliable source ) who had
been near to Khun Sa said that SLORC had agreed to pay ( as compensation )
500,000,000 Kyats for the surrender of the Ho Murng area and 200,000,000 Kyats
for the areas of Mai Sung, Murng Taw and Murng Thar. A former Shan junior
officer under Khun Sa had the following remark, " This SLORC money will only go
to Khun Sa, and a group of his relatives. It won't go to anyone 
else . " 

On 22-23/4/96, Khun Sa sent for 4-5 of his old followers and trusted men to go
and work for their group in Rangoon : Khun Sa has formed a 25-member-committe in
Rangoon and they are to take the leading posts in business and military affairs
( according to their plan to recruit men and establish home-guard paramilitary
unit called Kar Koy Yay. )

The 4-5 men which he sent for were mostly Chinese of his original SUA group. A
Shan Lt. Col. Zai Lurn Sau was also called, but could not go because he was not
one of those who had surrendered. He said " My life is not in their hands. Khun
Sa himself had made a pledge in front of the spirit-house that he would not
betray our national cause and kowtow to the Burmese as long as he was alive. But
now he has duped the people of Shan State. How could we continue to work with
them ? ". Khun Sa had sent word to Zai Lurn Sau to go to him in Rangoon and to
Maj. Zai Kham Phar to lead his 4-500 men to surrender at Tachilek. But Zai Kham
Phar said he could not surrender. If he could not stand on his own feet, he
would have to go and seek help from UWSA at Parng Sarng.

Col. Suu Lai, who had been the commander of the areas north and west of Tachilek
and who has not surrendered, was approached by Lt. Col. Lurn Sau and Maj. Kham
Phar to join their force. But he refused, and even told them not to come near
him. He said that at the moment he would not work with any other group, because
he had worked with Khun Sa as his follower for so long that he could not do
anything that would hurt him.

inside sources