MCA sells 17% of Nanyang to undisclosed buyer

comments     YS Tong     Published     Updated

MCA's investment arm Huaren Management had disposed of 17.59 percent of its shares in Nanyang Press Holdings — the publisher of two major Chinese dailies — paving way for the public-listed company to go back into trading soon in the stockmarket.

According to an announcement on the Kuala Lumpur Stock Exchange's (KLSE) website dated June 10, a total of 10,888,636 Nanyang Press shares were sold to an undisclosed party to comply with trading rules.

Nanyang Press has been suspended from KLSE at RM5.50 per share since Aug 20 last year after Huaren made a mandatory general offer which resulted in Chinese-based party's investment arm owning over 92 percent of Nanyang shares.

Under KLSE's rules, Huaren should hold no more than 75 percent of Nanyang shares or risk being de-listed. It was given a Feb 20 deadline but Huaren had asked for a four-month extension.

The disposal reduces Huaren's stake in Nanyang to 69.53 percent thus enabling the publishing company's shares to resume trading in KLSE.

More than one buyer

It is speculated that there was more than one buyer who took up the 17.59 percent stake in Nanyang Press.

These buyers, according to sources, are companies controlled indirectly by MCA through its proxies such as Kooperasi Jayadiri Malaysia (Kojadi) and Kooperasi SerbaGuna Malaysia (KSM).

Kojadi is an education loan scheme set up in early 1980s to help needy students to pursue higher education. As of February this year, the company has total assets over RM103 million.

Whereas KSM was set up in late 1960s to accumulate capital from Chinese lower middle-class to back another MCA's investment arm Multi-Purpose Holdings Bhd.

Both the helmsmen of Kojadi and KSM, Francis Huang and Lau Yin Pin respectively, are known to be aligned to party president Dr Ling Liong Sik. Lau is also the MCA Terengganu state liaison chairperson.

Sources added that the Nanyang shares transaction yesterday was for merely technical purpose in order to maintain the listing status of Nanyang Press, but in effect the publisher of Nanyang Siang Pau and China Press are still under the control of MCA.

"This was also perhaps it was difficult to find buyers who could come up with that much of cash," said one source who requested for anonymity.

It is estimated that if the Nanyang share was sold at RM5.50 yesterday, a 17.59 percent stake would cost close to RM60 million.

Chinese media monopoly

MCA had faced problems in disposing the Nanyang shares in recent months. The delayed divestment of the Nanyang shares is believed to be related to the difficulties encountered by the most likely buyer, Sarawak timber tycoon Tiong Hiew King.

Tiong, the owner of Nanyang Press' archrival Pemandangan Hijau Sdn Bhd which publishes rival papers Sin Chew Jit Poh and Guang Ming Daily , was said to be cash-strapped as his resources had been pumped into his media business overseas.

The proposal for Tiong to take over Nanyang Press had also apparently met with objections from Prime Minister Dr Mahathir Mohamad early this year as the premier told MCA he feared "the monopoly of Chinese media".

Tiong was rumoured to have had worked closely with MCA president Ling in the controversial acquisition of Nanyang Press last May amid strong public protests.

Mandarin newspapers have been influential in shaping the opinion and aspirations of the Chinese community and as such, the Nanyang takeover by MCA had been criticised as a move which may lead to the decline of editorial independence.

At a top-level meeting recently, MCA leaders were told that Huaren has serviced up to RM24 million as loan interest over the past 10 months since the takeover.

The MCA's investment arm had acquired Nanyang Press in May last year with bank loans close to RM300 million pledged against its shares in Star Publications — the publisher of top-selling English daily The Star .



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