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MCA chief Ling Liong Sik said that the party's investment arm Huaren Holdings would divest about half of its RM230 million stake in newly acquired Nanyang Press to "a friendly and experienced partner", a source told malaysiakini today.

The source said that Ling, at a briefing with a number of MCA Selangor division leaders this afternoon, defended the Nanyang deal as "a good buy".

Ling added that since the party would soon sell about RM110 million of its Nanyang shares, MCA would not be burdened by the loan which Huaren has to take, to pay for the acquisition.

"However, Ling did not disclose who the buyer is. And he did not mention when the shares would be sold to the new partner nor touched on the exact percentage of the stake that would be sold for RM110 million," said the source.

It is learnt that about 30 division leaders attended the noon briefing, which was held in Ling's office at the Transport Ministry.

100 percent loan

Hume Industries announced yesterday that the deal was signed between Huaren and Nanyang - the publisher of Chinese dailies Nanyang Siang Pau and China Press - for RM230 million in cash.

Yesterday, the party's senior vice-president Chua Jui Meng told reporters that Huaren would be using all of its 68 million shares in Star Publications - which publishes top selling English daily The Star - and 40 million shares in Nanyang as collateral for the RM230 loan.

According to Chua, this could eventually burden the party and its members.

"At the meeting, Ling argued that if MCA failed to buy the two Chinese dailies, it might result in (rival political party) Gerakan controlling the press," the source said.

At the briefing, a party leader queried Ling about possible competition from rival newspaper Sin Chew Jit Poh which could "kill Nanyang".

"Ling said Sin Chew 's boss, timber tycoon Tiong Hiew King, is a good friend. He said Tiong spends about RM80 million to promote the sales of Sin Chew annually. However, he believed that Tiong would cooperate with MCA," said the source.

Likely buyer

The source told malaysiakini that the party president's briefing hinted that Tiong could be the likely buyer for about half of MCA's RM230 million stake in Nanyang.

MCA vice-president Fong Chan Onn also told grassroot leaders today that Nanyang could prove to be a profitable asset for the party.

Since MCA bought Nanyang at RM5.50 per share yesterday, the company's share has shot up to as high as RM6.05 today, but closed at RM5.95.

The controversial takeover of Nanyang has evoked a volley of protest from the public, journalists and other groups concerned about press freedom. In a demonstration by two opposing groups on the issue outside the MCA headquarters on Wednesday, tempers flared and scuffles erupted.