The Kuala Lumpur Stock Exchange (KLSE) today announced it has approved Nanyang Press Holdings' application for a four-month extension to comply with its 25 percent public shareholding spread requirement.

This gives Nanyang's major shareholder Huaren Holdings a breather until June 22 to reduce its 92.14 percent stake in the company.

According to the main board listing requirements, Nanyang, with a paid-up capital of RM61.9 million, would also have to spread the 25 percent stake among at least 1,000 members, each limited to a five percent stake.

Nanyang, the publisher of two major Chinese dailies — Nanyang Siang Pau and China Press — applied for the extension a month before the original Feb 22 deadline set by the KLSE. However, the company gave no reason as to why it wanted the extension.

Nanyang shares have been suspended from trading since Aug 20. The company was given a six-month period to comply with the KLSE requirement to retain its public listed status.

It is learnt that Nanyang has some 990 public shareholders, a sum which falls short of the KLSE requirement.

Nanyang was acquired by Huaren Holdings — MCA's investment arm — last May amid strong protest from the Chinese community who feared that the dailies published by Nanyang would be converted into propaganda tools of the government and the Chinese-based party.

The deal also led to an internal quagmire in MCA. The party split into two camps, better known as Team A and Team B. The first, which favoured the deal, is led by party president Dr Ling Liong Sik while the opposing Team B is helmed by deputy president Lim Ah Lek.

Suitable player

The extension request had fueled market speculation that Huaren was unable to find a suitable player to take up a major portion of its shares in Nanyang.

Initially, rival newspaper Sin Chew Jit Poh ''s boss Tiong Hiew King was rumoured to be interested and this also sparked fear among the Chinese community that the timber tycoon would control the country's four major Chinese-language dailies.

Meanwhile, political observers said the four-month extension was to avoid stirring up negative public sentiments as this could prove detrimental to certain MCA leaders in the upcoming party elections.

The party elections at the branch level will begin tomorrow, followed by divisional elections next month and for the central leadership in June.