ALL EYES on Securities Commission: Will it bow to Umno wishes or protect the market's integrity?

On 12 November 2013, Utusan Melayu Bhd announced to Bursa Malaysia that it will be raising approximately RM40 million via a rights issue to its shareholders. It's 49.8% shareholder, UMNO has agreed to underwrite any unsubscribed rights offer.

The real reason why the UMNO-led government has been repeatedly calling for government-linked companies (GLCs) to advertise aggressively in Utusan Malaysia is now exposed.

On 13th September 2013, Dato' Seri Najib Razak, who is also the Finance Minister had called upon government departments and GLCs to spend more advertising money with Utusan ostensibly because the paper "has never backed down in defending our race".

Umno must be censured

Datuk Ahmad Maslan, the Deputy Finance Minister followed up by announcing last week that he has written to instruct the chairman and chief executives of the GLCs to advertise more in the Malay daily.

Utusan's call to raise funds and the UMNO Ministers' plea for more advertisements by government agencies and companies proved that Utusan is in dire financial straits. The company is now laden with RM195 million in debt as at October 2013, made losses of RM15.8 million for the financial year 2012. The losses continue to rise as in the first quarter of this year alone, the losses have amounted to RM8.8 million.

Right-thinking Ministers in the Cabinet must voice their opposition to the abuse of tax-payers' monies to bailout Utusan. The Prime Minister, who is also the Finance Minister as well as the President of UMNO must be chastised for acting clearly in conflict of interest.

Act independently

More importantly, as highlighted by my colleague Teo Nie Ching, Member of Parliament for Kulai yesterday, the Securities Commission must act independently without undue interference from the Finance Ministry to exempt UMNO from conducting a mandatory general offer to buy out minority shareholders of Utusan Melayu Bhd.

Based on current regulations, if UMNO's stake in the company increase beyond 2%, it must make an offer to buyout other shareholders in the company. Given UMNO's undertaking to subscribe to the rights offer, UMNO will increase its stake to at least 53.1% and hence trigger the mandatory general offer.

Therefore, it is all the more important for Securities Commission to protect the integrity of our financial markets. It must not only act fairly, but also be seen to act fairly to all investors and Malaysians.

Tony Pua is the MP for PJ Utara