KUALA LUMPUR: Prominent tycoon Syed Mokhtar Al-Bukhary has extended his control over Umno’s former media empire by gaining a crucial role over the future of Utusan Group’s newspapers.
In an announcement to the stock exchange today, Utusan’s publishing company Utusan Melayu (M) Bhd said it would sell a 70% stake in its wholly-owned subsidiary Dilof Sdn Bhd to Aurora Mulia Sdn Bhd, a company believed to be controlled by Syed Mokhtar.
Dilof is the holder for the publishing licences issued by the home ministry for the group’s newspapers – Utusan Malaysia, Mingguan Malaysia, Kosmo and Kosmo Ahad. The licences are commonly called KDN permits and must be renewed annually.
Utusan said Aurora Mulia was chosen as it is the major shareholder of Media Prima Bhd, the country’s largest media house which owns TV3 and other commercial television and radio stations, and the New Straits Times, Berita Harian and Metro newspapers.
In July, Aurora Mulia was reported to have bought Umno’s 11.09% stake in Media Prima Bhd, according to the Malaysian Reserve business newspaper, which is also controlled by Syed Mokhtar. In two more deals in July and August, Aurora Mulia raised its stake to 20.56%.
Syed Mokhtar is also believed to control a 14.76% stake in Utusan’s owner, Utusan Melayu (M) Berhad.
One of Aurora Mulia’s board members is Syed Mokhtar’s son Syed Danial, while the other directors are Ahmad Khan Jaffa Khan and Azman Hanafi Abdullah.
Umno is reported to have maintained a stake of about 8% in Media Prima.
Utusan said the disposal of its stake in Dilof was to ensure the continuity of 80-year-old Utusan Malaysia and the 15-year-old Kosmo, Bernama reported.
The Utusan group has faced cashflow problems because of declining revenues from circulation and advertising. A financial injection in Dilof from Aurora Mulia would ensure the continued publication of both newspapers, the company said.
“The investment will also see the consolidation of support departments such as printing, distribution and advertising for the publication of several major newspaper brands in the country,” the company said, according to Bernama.