Utusan takeover: No exemption for Umno, SC urged

DAP MP for Kulai Teo Nie Ching says Umno is avoiding the mandatory takeover of Utusan so that it can continue to support the right-wing paper without incurring interest costs.

KUALA LUMPUR: A DAP lawmaker is urging the Security Commissions not to provide Umno exemption from a mandatory takeover of Utusan Melayu (M) Bhd, after the party proposed to pump at least RM40 million into the company.

The mandatory takeover is triggered by the fact that Umno’s shares will increase from 49.8% to 53.1% through a proposed two-call rights issues, according to a Bursa Malaysia filing made two days ago, Malaysiakini reported.

The mandatory takeover would force Umno to buy all Utusan Melayu shares not already owned by the party.

“Umno is seeking an exemption so that it can support Utusan’s bid to raise funds without further incurring interest costs,” Kulai MP Teo Nie Ching  told a press conference at the Parliament lobby today.

“However, the sustainability of Utusan should not be at the expense of taxpayers’ money or minority shareholders’ interest.”

She said that the Security Commissions should not grant Umno exemption from the takeover, as it would be detrimental to minority shareholder rights.

“It will be a mockery of our capital market regulations and degrade the transparency and integrity of Bursa Malaysia and the Security Commissions,” the DAP assistant national publicity secretary said.

“It will tell the financial community that special preferences continue to exist for Umno and their cronies at the expense of minority shareholders and discourage investment in our capital markets.”

Teo pointed out that there was no reason for Umno to be exempted, given that it fulfilled the requirements needed for a mandatory takeover, per the Malaysian Code of Take-overs and Mergers 2010.

The code states that requirement is acquiring more than 2% of the voting shares or voting rights of a target in any period of six months; or obtaining voting shares or voting rights of more than 33%, she said.

She added that the remaining shareholders may be interested in a mandatory takeover, given that Utusan’s circulation was dropping and it had had posted a net loss of RM88.8 million in the first quarter of this year.

“It is undeniable that Utusan is now having financial difficulties to sustain itself. As at Oct 31, 2013, the total borrowings of the Group amounts to approximately RM195 million.

“That’s why Umno president Najib Tun Razak and his Deputy Finance Minister Ahmad Maslan have recently tried to bail out Utusan by urging top government-linked companies (GLC) to advertise more in Utusan,” said Teo.