MCA must divest Nanyang shares by next month
Still struggling to contain its internal strife, MCA is now faced with a business predicament. The party must divest at least 25 percent of its stake in Nanyang Press Holdings before its triennial elections next month or risk losing the company's public listed status.
Last Thursday, the Kuala Lumpur Stock Exchange announced that MCA's investment arm — Huaren Management which acquired Nanyang Press last May — has engaged Rashid Hussain Securities as its agent to place out 10.9 million shares.
The transaction must result in Huaren holding less than75 percent of the shares in Nanyang Press or the company which publishes Chinese dailies, Nanyang Siang Pau and China Press , would be delisted under the trading rules.
Huaren should have divested the shares by Feb 20 as required by KLSE. However, a four-month extension was sought and subsequently approved, deferring the deadline to June 22.
Informed sources told malaysiakini today that the delay was a result of the difficulties faced by the potential buyer, Sarawak timber tycoon Tiong Hiew King.
It is learnt Tiong, who owns rival Pemandangan Hijau Sdn Bhd which publishes Sin Chew Jit Poh and Guang Ming Daily , is cash-strapped as a large chunk of his resources have been channelled to his media business overseas.
PM fears monopoly
The sources added the proposal for Tiong to take over Nanyang Press had also met with objections from Prime Minister Dr Mahathir Mohamad early this year as the premier feared "a monopoly of the Chinese media".
"In simple words, Mahathir does not want to see only a handful of people controlling the Mandarin dailies and hold Barisan Nasional at 'ransom' at the forthcoming general elections," said a party source who requested anonymity.
Tiong was rumoured to have had worked closely with MCA president Dr Ling Liong Sik in the controversial acquisition of Nanyang Press last year amid strong public protests.
Last November, international finance news agency AFX reported that Huaren had sold 51 percent of Nanyang shares to Tiong, a charge which was denied by all parties involved.
Mandarin newspapers have been influential in shaping the opinion and aspirations of the Chinese community and as such, the Nanyang takeover was criticised as a move which may lead to the decline of editorial independence.
The fear was aggravated late last year when Mahathir openly blamed Nanyang Siang Pau for causing the ruling coalition's defeat in the crucial Lunas by-election by highlighting the views of the opposition.
At a top-level meeting recently, MCA leaders were told that Huaren, which had acquired Nanyang Press with bank loans close to RM300 million pledged against its shares in Star Publications, has serviced up to RM24 million as loan interest over the past 10 months since the takeover.
Sources believe the Nanyang issue may be revived by "certain disgruntled quarters" within the party who had opposed the deal last year after the party election on June 29, despite a peace plan arbitrated by Mahathir recently.
"Last year, it was just about going against the wishes of the Chinese community but now, it has turned into a financial problem which may bring down the party in the future," said another source.
The Nanyang Press has been suspended from the stock market at RM5.50 per share since Aug 20 last year after it made a mandatory general offer and resulted in an ownership of over 92 percent Nanyang shares.
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