MCA has agreed to sell a majority stake in Nanyang Press Holdings to Chinese media baron and competitor Tiong Hiew King, reported financial news agency AFX-Asia today.

According to the report, MCA and Tiong will sign an agreement soon to transfer 51 percent of MCA's stake in Nanyang Press to Tiong's unnamed nominee company.

Nanyang Press publishes two major Chinese dailies, Nanyang Siang Pau and China Press while Tiong is the publisher of rival - and top selling paper - Sin Chew Jit Poh as well as sister paper Guang Ming Daily .

Observers said the move would allow Tiong to completely corner the Chinese-language newspaper market in Malaysia. Fears of public opposition to the deal would required Tiong to buy the stake in Nanyang Press through a nominee.

"Tiong's ownership in the nominee company will not be disclosed until after the MCA party elections (next year)," said the report, quoting sources within MCA and Nanyang Press.

The report also said that as a preclude to the takeover, business cards in the Nanyang Press group are being changed from white to green - the corporate colour of Tiong's company.

MCA, through its investment arm Huaren Holdings, took over Nanyang Press for RM231 million in May, sparking a bitter dispute in the party. Several leaders, led by deputy president Lim Ah Lek, had opposed the takeover, citing disapproval by the grassroots against the deal.

However, party president Dr Ling Liong Sik was adamant for the deal to proceed and assured that the party will not impinge into the editorial content of the two dailies.

Editorial changes

However, malaysiakini reported that editorial changes have started to take place in Nanyang , where a popular critical full-page column and a vocal youth section have been dropped.

The column, known as Nanyang Saloon , was vocal on issues affecting national interests and the Chinese community such as reformasi and mother-tongue education. Meanwhile, the Youth Mission focused on human rights, press freedom, social problems and campus politics.

Speculations that MCA, which also controls the widely read The Star daily, will eventually sell its stake in Nanyang Press to Tiong has been around since the takeover, but have been dismissed by both Ling and Tiong.

Recently, Ling announced that the party was looking at two unidentified prospective buyers to dispose at least some of the shares so that the Nanyang shares can be listed again.

The shares have been suspended from trading since Aug 20 after MCA bought 92.14 percent stake following a mandatory general offer. MCA had originally bought 72.35 percent of Nanyang Press from Hume Industries.

It was given six months by the Securities Commission to dilute its stake in Nanyang Press to 75 percent in order to retain its listing status. Ling had also been reported as saying that Huaren will reduce its stake to only 20 percent, and the new partner will be "the largest shareholder" in Nanyang Press.

"From day one, we knew that Nanyang was designed to be sold to Tiong. The only question that puzzles us is why should the MCA president subject the party to so much political risk and stress only to pass on control to Tiong," AFX quoted a source.

Illogical move

Meanwhile, an MCA central committee member told malaysiakini that it was illogical for Tiong to take over Nanyang Press.

" Nanyang is already running at a loss. Its readers too have defected to Sin Chew . So why should Tiong still insist on buying Nanyang Press?" asked the committee member.

However, AFX reported that Nanyang might be turned into "an upmarket, subscription-based business-focused newspaper" while its sister paper China Press will focus on the evening edition.

"It is possible that Tiong may eventually merge Nanyang and Sin Chew as both papers are competing for the same market segment," said AFX .