If Umno wants to pump more money into Utusan Melayu (M) Bhd and take a bigger stake in the media company, then it should also rightfully buy up the Bursa-listed publisher and take it private, an opposition parliamentarian said today.

According to the Malaysian Code of Take-overs and Mergers 2010, Umno's move to buy more shares in Utusan Melayu (M) Bhd through an injection of at least RM40 million announced recently, must be followed by a mandatory offer (MO) to buy up all shares in the company.

NONE However, Umno has applied to the Securities Commission (SC) for an exemption.

Calling it a "mockery of our capital market regulations," DAP MP Teo Nie Ching ( right ) said the SC should reject this request from Umno.

"The SC must not grant Umno exemption from the MO as it will be detrimental to minority shareholder rights. It will make a mockery of our capital market regulations and degrade the transparency and integrity of Bursa Malaysia and the SC," the Kulai MP added in a statement.

Utusan Melayu is the publisher of Malay daily Utusan Malaysia. It plans to issue up to 110,733,837 new shares to existing shareholders and Umno, as the major shareholder of the company, is slated to take up the biggest chunk.

Umno's shareholding could rise from 49.8 percent to 67.2 percent after the two-calls rights issue .

Teo said that if the SC granted Umno the exemption, then minority shareholders would suffer. They would see their shareholdings diluted and without the chance to sell their shares to Umno.

‘It will discourage investment in capital markets'

"It will also tell the financial community that special preferences continue to exist for Umno and their cronies at the expense of minority shareholders, and discourage investment in our capital markets," she said.

To back reasons why some minority shareholders may want to sell out of Utusan Melayu, Teo cited some of the company's negative factors.

NONE The circulation of its newspaper Utusan Malaysia has been sliding down, from 350,000 to about 178,000 a day in December 2012. The company also posted a net loss of RM15.8 million for the financial year ending Dec 2012 and a net loss of RM8.8 million in the first quarter of this year.

As at Oct 31, 2013, the total borrowing of the group amounted to RM195 million, she added.

However, Utusan Melayu returned to the black at the end of June 2013, posting a net profit of RM1.9 million, possibly the result of increased by political campaign advertisements during the May 5 general election.

Umno's move to directly pump more money into Utusan Melayu follows Prime Minister Najib Abdul Razak call's in September to government-linked companies to do their national duty by advertising more in Utusan Malaysia .

The move, supported by some BN MPs, has drawn flak from others as Najib is also the president of Umno.