By admitting that the MCA purchase of Nanyang Press Holdings Bhd was a “strategic political investment”, Ling had in fact debunked his own earlier claims that the Huaren Holdings Bhd.’s RM230 million takeover of the two Chinese newspapers, Nanyang Siang Pau and China Press, was a strictly business deal and that the MCA has no political intentions to interfere with the press freedom and independence of the two dailies.
MCA Vice President and Deputy Finance Minister, Datuk Chan Kong Choy was right when he said that the MCA purchase of Nanyang Press Holdings Bhd made no business sense.
As pointed out by Chan, based on the results of the first nine months of its present financial year, which ends this June, Nanyang is not expected to earn more than RM4mil for the year.
MCA has to borrow RM230 million to acquire 72.3% of Nanyang, but it still has to make the mandatory general offer, which cannot be lower than RM5.80 per share - which would raise total borrowings to RM311.8 million.
At an interest of 10% per annum, MCA will have to repay RM31.8 million yearly in interest. But Nanyang is expected to earn only RM3 million this year - clearly not a good business deal.
Even with RM4 million in profit this year, each Nanyang 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 RM31.8 million in interest yearly. If the Chinese community boycott of the two newspapers persist, and advertising revenues fall further, then the profit will dip even further.
Chan said that Ling had said that the purchase will be financed entirely by borrowings, using all the holdings in Star Publications and Nanyang, risking MCA losing control of The Star should something untoward happen to Nanyang.
Although the MCA takeover of the two Chinese newspapers make no business sense, Ling is right when he said that it is a “strategic political investment”, “strategically vital” to Ling’s game-plan to consolidate power in party and to give blind support to the Prime Minister, Datuk Seri Dr. Mahathir Mohamad but “strategically harmful” to the legitimate rights and interests of the Chinese community, Chinese education, press freedom and democracy in Malaysia.
Ling’s confession is a confirmation of the worst fears of the Chinese community about the hidden agenda of the MCA President in the gobbling up of Nanyang Siang Pau and China Press and reinforcement of the reasons why the MCA takeover of the two Chinese newspapers would be a triple catastrophe firstly to the Chinese community and the cause of Chinese education, secondly to press freedom and democracy in Malaysia and thirdly, the livelihood of 2,000 people who directly or indirectly depend on the healthy development of the two dailies and why the MCA takeover must not be allowed to succeed.
Ling seems confident that the MCA extraordinary meeting he has summoned for Saturday, 24th June 2001, would give the strong endorsement he needs to flout the aspirations of the Chinese community and proceed with the MCA acquisition of Nanyang Siang Pau and China Press to further his own game-plan and help in the accomplishment of Mahathir’s different game-plan, and if Ling is proved right about the 2,500 MCA delegates at the MCA EGM, then a new phase to compel the MCA to “vomit out” the “swallowed” Nanyang Siang Pau and China Press must be embarked upon.
(18/6/2001)