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Buyer Emerges, MCA Divided, Transaction Illegal
By Reuters Edge STS

17/6/2001 9:38 am Sun pi_news_id=745353&pi_ctry=my&pi_lang=en

Buyer emerges for Malaysian Chinese party's dailies

By Wong Choon Mei

KUALA LUMPUR (Reuters) - A potential buyer emerged on Friday for a Mandarin language newspaper group controversially taken over late last month by Malaysia's main ethnic Chinese political party.

Tycoon Lim Guan Teik, who controls paper carton manufacturer Muda Holdings, said he will lead a consortium of businessmen and community leaders in a bid to take Nanyang Press off the Malaysian Chinese Association's (MCA) hands.

The MCA, a key partner in Prime Minister Mahathir Mohamad's ruling alliance, angered the Chinese community by taking over Nanyang and caused a rift in its own ranks at the same time.

Critics slammed the deal as smacking of a government attempt to increase its influence over the media.

Party president Ling Liong Sik rammed through the bid by MCA investment arm, Huaren Holdings, for Nanyang on May 31, but last week he said he would hear offers from anyone interested in taking a stake.

"A consortium led by Chinese community business leader Tan Sri Lim Guan Teik will be submitting a proposal to the Malaysian Chinese Association for the takeover of Huaren Holdings 72.35 percent in Nanyang Press Holdings today," a news release issued on behalf of the consortium said.

Details of its bid will be announced at a news conference on Monday.

MCA president Ling was accused by two senior members of breaking the party's constitution to push through the deal.

"The transaction is unlawful, violating Article 150 of the party's constitution, making the entire deal null and void," vice president Jimmy Chua said. "Nobody in the party is above the constitution."

Article 150 disallows party property to be charged to secure loans without the prior approval of the general assembly.

Chua said party headquarters had taken out a 230 million ringgit ($60 million) loan secured by shares without having obtained general assembly approval.

Almost 800 million ringgit worth of shares were pledged to raise the 230 million ringgit acquisition price, representing more than 300 percent cover.

"The banks have asked for an enormous amount of security. That's almost 90 percent of all the assets of MCA members," said Chua.

Analysts also questioned the deal.

A week before the transaction was completed the publisher declared a special 103.27 percent dividend which would effectively use up all the firm's cash.

"Nanyang was valued at about 15 times earnings and that's in line with the sector," said Jeffrey Tan of KAF, Seagroatt & Campbell.

"But what worries investors is cashflow. Nanyang's has been earmarked for the dividend while MCA's is almost all gone after the purchase," Tan said.

MCA members opposing the deal began a nationwide campaign to drum up support for their cause, and this week Nanyang shares have plunged 16 percent to 5.05 ringgit from 6.0 ringgit.

Lim Guan Teik leads Chinese group to bid for Huaren's stake in Nanyang Press

By Thomas Soon, 6.07pm

Associated Chinese Chamber of Commerce and Industry (ACCCIM) president Tan Sri Lim Guan Teik is leading a consortium of Chinese community leaders and businessmen to make a bid for the takeover of Huaren Holdings Sdn Bhd's 72.35 per cent stake in Nanyang Press Holdings Bhd.

A Press conference will be held on June 18 to announce the detail of the proposed bid.

According to a statement issued on June 15, it said: "In this Nanyang Press takeover bid, Tan Sri Lim is leading the consortium in his individual capacity."

Lim is also the controlling shareholder of listed Muda Holdings Bhd.

The statement was issued from the office of Tan Sri Ngan Ching Wen, who is a member of the consortium. Ngan is the adviser of ACCCIM.

Nanyang is the publisher of Chinese dailies Nanyang Siang Pau and China Press, and several magazines. Huaren's acquisition of the stake comprising 41.84 million shares in Nanyang Press for RM230.12 million, which saw overwhelming opposition, was completed in an off-market deal on May 31.

Meanwhile, at a press conference this morning, MCA deputy president Datuk Lim Ah Lek and vice-president Datuk Chua Jui Meng said they had advised party president Datuk Seri Dr Ling Liong Sik to sell the shares to an independent Chinese organisation.

They said the transaction was unlawful and unconstitutional, and called on Dr Ling to sell the stake in Nanyang Press. "The transaction is unlawful, violating Article 150 of the party's constitution, making the entire deal null and void," said Chua. story/0,1870,51515,00.html?

Jun 16, 2001

Nanyang press bid: Investors step forward

KUALA LUMPUR - Prominent businessman Tan Sri Lim Guan Teik will lead a consortium of Chinese community leaders and businessmen to make a bid to buy Nanyang Press Holdings from the MCA.

Details of the takeover will be released on Monday, according to a statement issued from the office of Tan Sri Ngan Chin, who is also a member of the consortium.

Tan Sri Lim is a controlling shareholder of the publicly listed Muda Holdings Bhd.

However, the statement said he would be acting in a personal capacity to lead the consortium in its bid to take over Nanyang from Huaren Holdings - the investment arm of the MCA. --Bernama story/0,1870,51520,00.html?

MCA leaders broke rules, says party V-P

Divided MCA members look headed for a showdown over the pledging of party assets to secure a loan for the purchase of two Chinese newspapers

By Leslie Lau

MALAYSIAN Chinese Association (MCA) vice-president Datuk Chua Jui Meng yesterday accused party leaders of acting illegally in pledging the party's entire assets to secure a loan to acquire the Nanyang Siang Pau media group.

His accusation that the MCA's central committee had breached the party constitution threw the controversial deal into question and plunged the party deeper into crisis.

Citing the party constitution, Datuk Chua said the approval of a general assembly of the party was needed before leaders could pledge any asset to secure any loan.

'The entire transaction is tainted. It is in violation of the party constitution,' he said at a joint press conference with deputy president Datuk Lim Ah Lek.

Datuk Chua and Datuk Lim have been at the forefront of a campaign against party president Datuk Seri Dr Ling Liong Sik in the last few weeks.

They have accused him of acting improperly and riding roughshod over the views of the Chinese community who have overwhelmingly opposed the acquisition.

The MCA central committee approved the party's takeover of Nanyang, which publishes Nanyang Siang Pau and China Press dailies, on May 30.

The party pledged its entire stake in Star Publications, the publisher of Malaysia's leading English language daily The Star - worth more than RM500 million (S$240 million) - and its acquired stake in Nanyang - worth more than RM250 million - to secure a RM230 million loan.

The eight central committee leaders who voted against the deal have been on a nationwide roadshow since then, attacking Dr Ling over the deal which has caused wide cracks in the party.

'The only solution to this impasse now is for the party to dispose of Nanyang to a third party representing independent Chinese interests. It should not be a problem since the president has indicated that this was a golden buy,' said Datuk Chua.

Datuk Lim said that the controversy had to be settled soon because the party risked losing the support of the Chinese community in the next General Election.

'We want to resolve this in a mature manner. If it is agreeable to Dr Ling, then the shares should be disposed of to a third party, but definitely not Sin Chew Jit Poh,' he said.

Sin Chew Jit Poh, the leading Chinese newspaper in the country, has expressed interest in acquiring Nanyang but this has also met with objections from the Chinese community who fear the creation of a media monopoly.

On Thursday, Datuk Chua and Datuk Lim met Dr Ling and secretary-general Datuk Ting Chew Peh. However, they failed to resolve the crisis.

All four leaders are trustees of the party's investment arm, Huaren Holdings, which bought Nanyang.

But while the point of contention is the acquisition, the crisis has turned into an intense power struggle for the party leadership, with rival factions vying for support from the grassroots.

Dr Ling denied the accusations that he had infringed the party constitution. He is now gambling on holding an extraordinary general meeting on June 24 to resolve the controversy.

'Let the delegates decide. They are the highest decision-making body so whatever decision made is final,' he said.

Aides to Dr Ling say he is confident of mustering enough votes to defeat any objections to the deal.

But aides close to Datuk Chua and Datuk Lim say they are also confident of garnering winning support.