MCA deputy president Lim Ah Lek today attacked the party's takeover of two major Chinese dailies, calling it a "risky" investment. In a press statement, Lim, who opposed the deal, said the party would need take a 100 percent loan to finance the purchase.

He added that party's investment arm Huaren Holdings will be using all of its 68 million shares in Star Publications, which publishes the English daily The Star , and 40 million shares in Nanyang Press (after the acquisition) as collateral for the RM230 million loan.

"This means that MCA is utilising almost all of Huaren's assets. The investment risk is obvious," he said.

It was announced on Monday that Huaren will buy Nanyang Press - which published Nanyang Siang Pau and China Press - for RM230 million in cash from tycoon Quek Leng Chan. Quek's Hume Industries announced this afternoon that the deal was signed between the two parties.

Lim added that MCA assets belong to all its members as a result of their collective hard work and therefore "must be handled cautiously".

"We must avoid repeating mistakes that had caused us severe pain in the past," he stressed.

Yesterday, the party's 40-member central committee approved the takeover of Nanyang Press. However, eight members, including Lim and vice-president Chua Jui Meng voted against the deal.

Respect views

Lim also lamented that the sale and purchase agreement in the takeover exercise was sealed even before the central committee convened yesterday.

He said on top of the investment risks and the lack of proper procedures in decision-making, the party also need to "consider and respect the views and wishes of the Chinese community".

"Without the support of the Chinese community, the MCA can never survive," said Lim, who is also one of the trustees and shareholders of Huaren.

It was reported that for the deal to materialise it required the signatures of Huaren's four trustees who apart from Lim, are party president Dr Ling Liong Sik, vice-president Chua Jui Meng and secretary-general Ting Chew Peh.

However, during the central committee meeting last night, it was decided that it was not necessary for the trustees to meet and approve the purchase, and the party president was mandated by the committee with full powers to proceed with the purchase.

Earlier today, Chua Jui Meng had also stated his objection to the deal stating "it was a matter of principle".

The controversial takeover had sparked a barrage of protest from the Chinese community, journalists and other groups who fear that the acquisition would stifle press freedom and that the dailies would be transformed into propaganda tools.