WHILE most people in Myanmar live close to the poverty line, charismatic tycoon Tay Za has used his links to the junta to build a business empire stretching from telephones to tourism, observers say.

Tightened US sanctions against the ruling generals have in particular targeted Tay Za, whom Washington calls a 'regime henchman' and accuses of being an arms dealer.

The United States has included Tay Za, said to be a close associate of the junta, and his companies under three rounds of sanctions that followed the military's deadly crackdown on protests led by Buddhist monks last September.

It has progressively tightened them in the absence of any apparent democratic progress, despite the junta's insistence that a constitutional referendum on Saturday will pave the way to multi-party elections in 2010.

The regime has vowed to press ahead with the referendum despite a cyclone that struck at the weekend, killing at least 350 people, leaving hundreds of thousands homeless and cutting off water and electricity in the main city Yangon.

New US sanctions in February further targeted Tay Za and his firms, some of which operate out of Singapore.

Tay Za's Htoo Trading Co Ltd, which exports teak logs, was Myanmar's fifth-top exporter, earning 65.1 million US dollars (S$88.5 million) in the fiscal year ended March 2007, according to the Myanmar Times, a semi-official weekly.

The firm made its money 'simply because of its proximity to the regime', said Mr Sean Turnell, an economics professor who specialises in Myanmar at Australia's Macquarie University.

'He has a very close relationship with (Senior) General Than Shwe's family,' Mr Turnell said, referring to the junta leader.

Htoo Trading Co Ltd is one of seven companies blacklisted by the United States under sanctions against Myanmar imposed in October.

The move aimed to target organisations with ties to the junta, to pile more pressure on the regime after its September suppression of pro-democracy protests.

'He's one of the few businessmen who's thrived under this particular regime,' said Ms Debbie Stothard of the Alternative Asean Network on Burma, a human rights group.

'Ten years ago he was an unknown businessman.'

Three of the blacklisted firms named by US President George W. Bush were either based in or linked to Singapore.

They are Pavo Trading Pte Ltd, Air Bagan Holdings Pte Ltd and Htoo Wood Products Pte Ltd, which is also listed as being from Myanmar's main city, Yangon.

The Singapore companies worked from a 24th-floor suite of offices with no name-plate outside the opaque door.

Myanmar-watchers say Tay Za, in his early 40s, is linked to tourism, infrastructure projects and mobile telephone services, and was involved in the government's purchase of helicopters from Russia.

Mr Dave Mathieson, a consultant on Myanmar to Human Rights Watch in Bangkok, called him 'the richest man in Burma', using the country's former name.

Under a round of sanctions in late February, the US targeted two Tay Za-owned hotel chains - Aureum Palace Hotels and Resorts, and Myanmar Treasure Resorts.

Tay Za was sighted last September when he arrived on the first flight to Singapore of his Air Bagan Ltd. A few weeks later the US sanctions hit, and the airline said it was suspending the service.

In a speech made in November and posted on Air Bagan's website, Tay Za blamed 'restrictions on banking facilities' for the carrier's difficulties.

'The sanctions are misguided and unfair,' he said.

'The capital of Air Bagan is not related in any way with such businesses as drug trafficking, arms sales and money laundering but comes from the earnings of HGC (Htoo Group of Companies) through other legitimate businesses.'

He described himself as one 'who has contributed a lot in travel and tourism sector' and said his companies provide aid for schools, hospitals and pagodas.

Mr Turnell described him as 'easily the most flamboyant of the tycoons that Burma has produced.'