Dec 4, 2006

Oon Yeoh - The Malaysian paper chase

(TodayOnline) AN interesting thing is happening in the newspapers scene in Malaysia. While two leading Malay-language dailies are seeking consolidation, there is an attempt to break up a monopolistic situation in the Chinese-language media.

It has always been known that leading Malay-language newspapers are controlled by the United Malays National Organisation (Umno), the leading component of the ruling Barisan Nasional coalition government.

The party formally controls the Utusan Melayu group with an around 50 per cent equity stake in the company. Umno took over Utusan after a battle with the newspaper's editors and journalists in the early 1960s.

Although the New Straits Times group (NSTP) is not formally owned by Umno it has always been understood that it was indirectly under the party's control (through nominee business groups such as Media Prima, with a 43 per cent stake in NSTP).

Umno's de facto control was something that former Premier Dr Mahathir Mohamad alluded to a few months ago, when he lamented the fact that the group editor of the New Straits Times was a non-Malay.

According to news reports, the two public-listed newspaper companies will be de-listed and then grouped under a yet-to-be named entity. If this merger goes through, it will make Umno's control over the NSTP formal and give the party ownership of the country's largest media conglomerate (Media Prima also owns all the local private TV stations).

This consolidation exercise will allow the Umno-controlled papers to better challenge the other media powerhouse, Star Publications — controlled by the Malaysian Chinese Association, Umno's ally in the Barisan Nasional. Star Publications owns the leading English-language newspaper The Star, various magazines and a couple of radio stations.

From an editorial standpoint, there will probably be no discernible difference. Firstly, the editorial operations of the two companies will remain distinct even after the merger. This is a point that Prime Minister Abdullah Ahmad Badawi has stressed.

Secondly, although media watchdog agencies such as the Kuala Lumpur-based Centre for Independent Journalism and the Bangkok-based South East Asian Press Alliance have all criticised the proposed merger as a bad move for press freedom, the reality is that the government has always had editorial control of both the Utusan and NSTP groups. For example, group editors have always been regarded as political appointments, requiring the blessing of the prime minister himself.

In an interesting unrelated development, while the Umno-controlled media are looking at consolidation, there are moves to break up a monopolistic situation in the Chinese dailies. The four leading Chinese-language newspapers in the country are currently controlled by Sarawakian timber tycoon Tiong Hiew King through his company, Ezywood Option.

Mr Tiong is a former senator and former treasurer of the Sarawak United People's Party, a mainly Chinese component of Barisan Nasional.

Unlike the situation with the Malay newspapers, the concentration of ownership of Chinese dailies in the hands of a pro-government group has been fiercely opposed by the Chinese community.

This has prompted another Sarawakian business tycoon, Lau Swee Nguong, to make a monopoly-breaking offer to buy Mr Tiong's shares of Nanyang Press Holdings, which publishes Nanyang Siang Pau and China Press. The other group Mr Tiong controls is Sin Chew Media Group, which publishes Sin Chew Daily and Guanming Daily.

Said Mr Lau last week: "I shall accept and purchase all shares owned by Tiong, split the shares and re-sell these to any corporation, society or individual from the Chinese community, (provided that) no such corporation, society or individual shall own more than 5 per cent of the entire paid-up capital of Nanyang Press."

He added: "The Chinese community has reacted with great dismay to the unveiling of the Tiong family's controlling stake in Nanyang Press. The general consensus is that a monopoly of the Chinese media is inevitable ... effectively stifling opinions."

Mr Lau has also extended his offer to other shareholders including MCA, which controls 20 per cent of Nanyang Press shares, and has promised to raise RM5 million to be donated to the Chinese community to help them purchase Nanyang shares.

Whether Mr Tiong or MCA takes up Mr Lau's offer is yet to be seen, but there is considerable pressure from the Chinese community for this to happen. The Chinese media has traditionally been more independent than its Malay counterpart when it comes to political coverage and commentary, although industry observers say that this situation has been eroded considerably over the years as government political parties exert increasing editorial control over the dailies they own.

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