CAT: Secret sale of Nanyang shares may have breached law

comments     Published     Updated

MCA's investment arm Huaren Holdings has been criticised for divesting a substantial portion of its shares in Nanyang Press Holdings in a secretive manner.

In levelling the claim, the Committee Against the Takeover of Nanyang Press Holdings by MCA (or CAT) also claimed that the Securities Commission (SC) had not done its part to protect the right to information of minority shareholders in Huaren.

This was because the company has not disclosed the identity of the buyer(s) of the Nanyang Press shares.

"Whether Nanyang Press has fulfilled the 25 percent public shareholding spread requirement over 1,000 shareholders remains an unanswered question," said CAT chairperson Tang Ah Chai in a statement.

"This has seriously violated the principle of transparent corporate governance and free flow of information."

CAT was set up by representatives of various Chinese organisations last year when MCA acquired Nanyang Press, publisher of two major Mandarin dailies, in May.

On Saturday, several Mandarin newspapers reported that Huaren had sold 23.8 percent of Nanyang Press shares to an undisclosed party or parties at RM5.60 per share, effectively reducing its stake in the publishing company to 52 percent.

The was the second divestment to an undisclosed party or parties after the first in May, when a 17.6 percent stake was sold, also at RM5.60 per share.

Prior to the first divestment, Nanyang Press had been suspended from the Kuala Lumpur Stock Exchange (KLSE) for almost 10 months. Last August, Huaren made a general offer which resulted in it owning 93.2 percent of Nanyang Press shares.

Call to suspend Huaren

Tang said his group suspected that "political interference" was behind the SC move to allow Nanyang Press to resume trading on June 14 despite the company's failure to reveal vital information in the stock market.

He urged the KLSE to maintain its credibility by suspending Huaren if the company still could not disclose vital information regarding the shares transactions in Nanyang Press.

Tang noted that Huaren had concluded the transactions without seeking approval from its minority shareholders at a general meeting, as required under the Article 132(C) of the Companies Act 1965.

This may be a breach of the law, punishable by a maximum penalty of five years' imprisonment and fine of RM30,000 fine, said CAT.

The group reiterated its stand that MCA, a political party, should not own any newspaper and should dispose of all its Nanyang Press shares in a transparent and fair manner as soon as possible.



Malaysiakini
news and views that matter


Sign In