special report

Buying a memorial park should prove to be a "better business deal" for MCA rather than acquiring Nanyang Holdings, MCA vice-president Chan Kong Choy said on Thursday at a briefing for party members over the controversial Nanyang Press Holding takeover deal.

"What for buy a newspaper if you don't intend to control it?'' asked Chan, who also questioned whether is it a case of MCA having so much cash in hand that it doesn't know what to do with it.

"They are treating us like fools, like are we kids. A decision made at four o'clock, and at eight, senior reporters from Sin Chew were rushed into Nanyang to 'take charge'. If that is not to control, then what is it?," fumed Chan in referring to the unpopular decision of MCA president, Dr Ling Liong Sik in wanting to acquire Nanyang.

Chan was accompanied by Health Minister Chua Jui Meng, Member of Parliament (MP) for Serdang Yap Pian Hon, Selangor exco member Tang See Hang, Mentakab MP Fu Ah Kiow and Bentong MP Liow Tong Lai.

Six division leaders of Kelantan MCA were also present. They were from Pasir Mas, Pasir Puteh, Kuala Kerai, Gua Musang, Kubang Kerian, and Tanah Merah. Two deputy division chiefs were also present, one of them from the Kota Baru division, Lau Chee Heng.

Despite widespread criticism from various Chinese organisations, MCA's investment arm, Huaren Holdings, went ahead and acquired Nanyang Press Holdings from two Hume companies owned by tycoon Quek Leng Chan last month.

Nanyang Press publishes two Chinese dailies, the Nanyang Siang Pau and the China Press .

Widespread resentment

According to Chan, the people's opinion and sentiments can no longer be suppressed. "They are treating us like the Opposition, when in fact we are in one and the same family," said the deputy finance minister, who also lamented that there has been overt pressure from the top to block grassroots members from attending the briefing sessions held by the anti-takeover faction led by MCA deputy president Lim Ah Lek.

He also took exception at Ling's statement that the issue will "blow over" with time. "He said that he will kau tim (handle) those fellows in two weeks. What kind of attitude is that? Such arrogance from a leader,'' said Chan to a crowd of around 300 in a supposed closed door briefing, but in reality, open to almost anybody.

"It has been said that the acquisition is a very good business deal. We kept on asking for details, and in the end, they conceded that the purchase will be financed entirely by borrowings, using all the holdings in Star Publications, and 44% of Nanyang.

"All the Star shares are valued at around RM600mil, and together with the Nanyang stake, the value of the collateral put up to secure a RM230mil loan comes up to RM800mil,'' said Chan, who questioned the wisdom of betting all of MCA's 'chips' on something which had received the widespread resentment of the Chinese community.

"Have we forgotten the shameful days when each of us had to fork out RM100 or so from our pockets to save the MCA headquarters back in the '80s. With 43% holdings in Star, we can, at most, only pledge 10% as collateral as we stand to lose control of The Star if our stake falls below 33%. Should something untoward happen to Nanyang, we even run the risk of losing The Star ," said Chan.

Heavy interest

According to him, based on the results of the first nine months of its present financial year, which ends this June (from June 2000), Nanyang is not expected to earn more than RM4mil for the year.

"We are borrowing RM230mil to acquire 72.3% of Nanyang, but we still have to make the mandatory general offer, which cannot be lower than RM5.80 per share. And that should bump up total borrowings to RM311.8mil.

"At an interest of 10% per annum, we need to repay RM31.8mil yearly in interest. But Nanyang is (expected) to earn only RM3mil this year, so how can this be called a good business deal?

"What golden opportunity is this? Even a deputy finance minister will also shake his head after reading this,'' he said to widespread laughter among the audience.

"Even if it is RM4mil in profit this year, each share (at RM5.50 each) can only yield a profit of around 6.5 sen, versus the interest payment of around 55 sen per share if Nanyang has to service RM31.8mil in interest yearly.

"If Chinese NGOs and organisations do boycott the papers, and advertising revenues fall further, then the profit will dip even further. When the Central Committee members voted in favour of the purchase, did they have these figures before them? For us, from whatever angle we view it, be it popularity, economics or viability, we cannot see the point, and that's why we are objecting to the acquisition," said Chan.

"I don't understand. Chua Jui Meng doesn't understand, and I bet that 31 of the 32 central committee members who voted in favour of the acquisition also don't understand. As it is, only one person there knows what he is doing,'' he said, again to laughter of the appreciative audience.

"Or is MCA trying to help tycoon Quek Leng Chan, who made millions from selling Dao Heng Bank in Hong Kong. If MCA wants to make money, there are other ways. A memorial park is a good idea as someday, everybody's got to go there. Why interfere with something so central of the Chinese community?'' he added.

Betraying trust

The most illuminating comment of the night from Chan had to be this: "They cook a dish, and then they serve it to us, and force it to swallow whatever is being served. Every time it is like this. Well, we've had enough, and we are not going to swallow anything more.

"Those who want to swallow is their business. We are also elected by members. We are not a business entity. To protect the Chinese press does not mean buying it up,'' he said.

For Chua, being asked to sign over his voting rights as a Huaren trustee was indeed an "insult" to his intelligence and abilities.

"I was in Australia on May 23 when Chua Soi Lek called me on behalf of Dr Ling. If I sign, then I am betraying the trust of thousands and thousands of MCA members for I had sensed earlier that the Chinese community are against the acquisition.

"The fax was worded like this: We, Chua Jui Meng, Lim Ah Lek and Ting Chew Peh, hereby surrender our rights to vote to Chua Soi Lek at the trustees meeting. But as a trustee, I am not representing myself or my father, but the 90,000 MCA members,'' said Chua, who recalled in great detail how he formed his stand on the Nanyang issue.

"My plane was scheduled to land at 5.30pm at KLIA. It would take 45 minutes to get the baggage, and perhaps another 45 minutes to clear customs and immigration. But he (Ling), in a message conveyed to me earlier wanted me to be in his house by 6pm, which is only half an hour after touchdown.

"I conferred with my wife while we were on the way home in the plane. She told me to follow my conscience. And hence, I penned my thoughts and stand on the issue before I landed, and when I did, reporters were already waiting for me at the airport," said the Health minister.

Win-win formula

According to Chua, he already sensed the different mood of the Chinese while campaigning for the Lunas by-election. "Samy Vellu saw me and assured me that everything is fine.

"I asked him whether he is really sure. But he replied that the Chinese came out of their houses to shake hands with him when he was doing his rounds, and when they did, there were smiles on their faces.

"That was why Samy went on to vow that he will not return home if BN fails to secure the seat. However, I did not share his optimism. And the rest is history,'' said Chua, who alluded that the Deputy Prime Minister seemed to be more in touch with the feelings of the Chinese than the MCA president himself.

"At the central executive committee (CEC) meeting on May 30, we were given the chance to say all that we wanted. But he did not tell us that they had signed the deal with Hume on May 28. And the Securities Commission gave their approval for the takeover on May 25, which implies that clearance was sought earlier than May 25," said Chua.

"I have tried to be honest, and have been wanting to arrive at a win-win formula for all, be it the Chinese community, MCA and Barisan Nasional, but I feel disappointed. If trustees need not meet, then why go ahead with today's trustees' meeting?

"We need to be honest with each other for the sake of the party, and reach a consensus, but he has closed the door even before we meet.

"As trustees, we are not representing ourselves, but the interests of all members. And as a lawyer, I'm aware of my fiduciary duties as a trustee. What is the meaning of buying a newspaper if you don't intend to control it? It is by no means an easy or lucrative business," said Chua further.

Anti-monopoly

On whether MCA should relinquish its hold on The Star based on the principle that political parties should not own or control newspapers, Chua said that the English press is a different kettle of fish altogether.

"For those who read English papers, The Star is not a problem as they have other papers like the New Straits Times and The Sun , as well as a host of alternative media.

"Not so with the Chinese newspaper readers in Peninsular Malaysia who don't have much to choose from. The reality is that they don't support monopolies," explained Chua.