Is an alleged drug kingpin from China investing millions in a port in Laos?

Right now, the region’s biggest attraction is a huge casino that caters largely to visitors from mainland China, where almost all gambling is illegal, and foreigners, because gambling is outlawed for Laotians.

But there are plans for massive expansion.

The government of Laos allows the GTSEZ to operate with limited oversight from the central authorities, in theory to spur more investment. But officials outside the country worry that Laotian authorities signed a Faustian bargain, trading control in the border region to an alleged drug kingpin in exchange for economic growth.

Zhao’s exact role in the new port, which is about 12 miles upriver from the casino, isn’t known. But the fact that he attended the groundbreaking ceremony alongside a Laotian deputy prime minister and the provincial governor has caught the attention of law enforcement and government officials outside the country.

If Zhao is the legitimate investor he says he is, the project could simply be a smart example of vertical integration. Constructing a modern port in an unfrequented part of Laos could help service a new tourist city.

“To put a piece of infrastructure like this in the hands of this gentleman and his companies is, frankly, unbelievable,” Douglas said. “We’re really concerned.”

Zhao’s alleged ties to the project

The actual company behind the new investment, according to the Vientiane Times article, is Osiano Trading Sole Co., Limited. Khonekham Inthavong, whom state media reported was Osiano Trading Sole Co.’s president, said the project was meant to boost trade in goods and services in Laos, especially in the Golden Triangle.

Inthavong said the project is a joint venture “between domestic and foreign partners highly experienced in construction across the region,” per the Vientiane Times. He added that his company was established in 2012 “under Lao regulations with a network of business interests covering tourism development and agriculture, road construction and ports, real estate, insurance and a non-deposit taking microfinance institute.”

However, Inthavong and Osiano Trading Sole Co. appear to have sprouted up out of nowhere in the past two years. Searches in Laotian media and online of both Inthavong and his company turn up news of a few investments this year, but nothing before 2019.

A search through Laos’ business registry muddies the waters even further. It shows Osiano Trading Sole Co. was registered in July 2020 by Yoma Inthavong. It’s unclear if that individual is related to Khonekham Inthavong.

But Khonekham Inthavong registered a different business with a similar name, Osiano Land and Investment Sole Co., in 2018. It’s unclear what relationship these two businesses have with each other.

CNN was unable to reach Osiano Trading Sole Co.; Osiano Land and Investment Sole Co.; or Khonekham Inthavong for comment. Neither of the companies had a phone number, email address or exact physical address listed in their Laotian enterprise registration details. They do not appear to have websites, social media accounts or any sort of web presence — which is unusual for a company apparently involved in such a large-scale project. Messages sent to a Facebook account that appeared to belong to Inthavong went unanswered.

Despite Zhao’s lack of connection to the port on paper, Douglas said that “connecting dots between Zhao Wei and Osiano is not difficult.”

“Based on the intelligence we’ve received, Zhao is using a partnership with Osiano to expand the reach of his special economic zone,” Douglas said.

When asked for comment, the Laos Ministry of Public Security referred CNN to the Laos Ministry of Foreign Affairs, which has not responded to CNN’s formal letter. Calls to Laos’ Ministry of Industry and Commerce went unanswered.

Who is Zhao Wei?

In media images, Zhao, 68, is frequently seen flashing a wide, confident smile.

He does not appear to have done an interview with English-language media in the past five years. He declined to speak with CNN for this story and did not answer questions via email through a GTSEZ representative.

Since taking control of the GTSEZ, Zhao has spoken with Chinese and Laotian media on multiple occasions to share his story. As he tells it, it’s a classic rags-to-riches tale.

Zhao says he was born in a rural village in northern China, the fifth of nine children. His father died of cancer when he was five. After a brief formal education, Zhao says he taught himself Traditional Chinese Medicine to support his family.

“I studied medicine hard because I wanted to help and serve others,” he said.

Zhao’s passion for entrepreneurship, he says, was sparked later in life, after a friend invited him to join a lumber business. It’s not clear how he transitioned from that enterprise into the gambling industry.

But after reportedly working in casinos in Macao and Myanmar, Zhao built his own in one of the world’s biggest illicit drug-producing regions.

The Kings Romans Casino sits along the Mekong River inside the GTSEZ and is, quite literally, its crown jewel — the massive crown that tops its roof is visible across the Mekong River in neighboring Thailand. In recent years, new buildings have sprouted up around the casino, including what appears to be a massive, gilded hotel.

Zhao says his company has also invested in improving the standard of living for local people by building schools, temples, roads and sports grounds in Laos, Thailand and Myanmar — claims that CNN could neither verify nor disprove.

“He’s doing all of these sorts of PR efforts back in China and in Laos to make it appear that, well, I’m actually one of the good guys,” said Jason Tower, a researcher based in Myanmar for the US Institute of Peace.

Zhao says he and his businesses “strictly” comply with the law.

Why the port matters

Zhao and his companies have, in effect, built the foundations for a tourist city that can house 50,000 people. That’s no small feat considering that the GTSEZ is built on land that was, just years ago, Laotian jungle.

Much of that is thanks to Zhao’s vision.

“Those people are the victims of drugs because they don’t know anything else,” he said in a 2011 profile in Chinese state media.

“I think it is worthwhile to use gambling, which is small harm, to get rid of the bigger harm like drugs,” Zhao said.

So in 2007, Kings Romans signed an agreement with the Laotian government to jointly develop a tourist area in the region. Three years later, Laos’ Prime Minister signed a decree formally establishing the GTSEZ, effectively leasing the land to Zhao for 99 years.

The agreement stipulated that the GTSEZ would run its own affairs — from urban planning to municipal finances and even security in certain cases. Foreign experts who monitor the area say authorities on the ground answer to Zhao, which has effectively turned the zone into his “own personal fiefdom,” Douglas at the UNODC claims.

So adding a new port to supply this up-and-coming tourist destination in a remote part of the world makes business sense.

According to the Laotian state media article announcing the Ban Mom project, the port will take three years to build, and over the next nine years other supporting facilities, such as warehouses, plant and animal quarantine centers and staff dormitories, will follow.

Experts worry that, despite the rapid development, Laos is making the same mistake at Ban Mom Port that it did with the GTSEZ: giving a man with a dubious reputation more power in an under-policed part of the world.

Brian Eyler, the Southeast Asia program director at the Stimson Center, a Washington-based think tank, said the port project seems redundant because there are already two well-established ports on the Thai side of the Mekong River that facilitate commercial trade from China to Bangkok.

“The port is mostly unnecessary for active commercial traffic,” Eyler said in an email. “The Ban Mom Port will only facilitate commerce between China and Kings Roman Casino (Golden Triangle Special Economic Zone) and most commerce that happens around the casino is illicit trade in drugs and wildlife and human trafficking.”

Douglas explained the port could end up being used to ship precursor chemicals — the ingredients to make synthetic drugs — into the Golden Triangle and export the finished product down the Mekong, one of the most important waterways in Southeast Asia.

“There’s already a lot of allegations that he’s (Zhao) an active money launderer, he’s involved in drug trafficking and various forms of transnational crime,” Douglas of said. “If he’s involved in those activities, then the port can be used for these things.”

This industrial-level manufacturing of synthetic narcotics requires a steady flow of chemicals to make them, and until now, transporting precursors into Shan State has been a major logistical hurdle, according to Douglas.

“The fact is, there’s only a few ways you can really get high volumes of precursors into Myanmar,” he said. “Using this port, there’s an easy entry. You just simply take a boat upriver six or eight hours.”