Malaysia's Utusan Group ceases publication but may be back soon

Utusan's 862 employees have been placed on forced leave until Oct 30 by the company and it is said that a large number will not be re-hired.
Utusan's 862 employees have been placed on forced leave until Oct 30 by the company and it is said that a large number will not be re-hired.PHOTO: REUTERS

KUALA LUMPUR (THE STAR/ASIA NEWS NETWORK) - All publications under Malaysia's Utusan Group have ceased publication, effective Thursday (Oct 10), but sources say it will not be long before the newspapers hit the streets again.

All four Malay language newspapers - Utusan Malaysia, Mingguan Malaysia, Kosmo! and Kosmo! Ahad - are expected to resume publication on Nov 1 under a new management, according to information obtained.

"Utusan will live on. We are liquidating the holding company but the ownership of the printing licences (has) been acquired by Aurora Mulia and they will relaunch publications in the near future," Utusan executive chairman Abd Aziz Sheikh Fadzir told theedgemarkets.com.

Aurora Mulia, a company linked to tycoon Syed Mokhtar Al-Bukhary, has acquired a 70 per cent stake of Utusan-owned Dilof, which is the company holding the printing permits for the four newspapers.

Aurora Mulia also holds 31.22 per cent shares in Media Prima, currently Malaysia's largest media conglomerate.

Despite the good news, it is learnt that a large number of Utusan's existing 862 employees will not be re-hired.

Cash-strapped Utusan was once owned by Umno until the Malay nationalist party lost last year's general election.

It officially ceased operations on Wednesday after Datuk Abd Aziz announced that poor cash flow, mounting debts and declining sales led to the board of directors deciding on Monday to shut down the company's operations.

He said the board approved the Creditor's Voluntary Liquidation proposal and appointed UHY Advisory (KL) as interim liquidator.

"This step had to be taken because the board was of the view that the company is no longer solvent to continue business. For that reason, the company will cease operations on Wednesday," he said in a statement on Wednesday.

In an immediate response, National Union of Journalists (NUJ) Utusan representative Mohd Taufek Razak hit out at the top management, calling them "cowards" for not facing their employees and explaining the situation.

 

"The management has been inhumane. It is too short a notice for us to leave. This was a predictable situation, and until now not one representative of the executive management was present to explain to us what was going on," he told a press conference.

Mr Taufek said the 862 Utusan employees had been placed on forced leave until Oct 30 by the company, adding that the company still owed the employees two months' salary.

He said the interim liquidator was kind enough to grant extra time to the employees to clear their belongings from the building, adding that they have been given until 6pm on Thursday to do so.

Many of the employees were in tears as they took their last photographs in the newspaper's office and carried boxes of their belongings out. Many had worked there for decades.

Mr Taufek said the liquidators would hold a briefing for all employees at 3pm on Oct 30.

Utusan Malaysia was first published as Utusan Melayu in Jawi script in 1939 in Singapore. It was founded by Mr Yusof Ishak, who later became the first president of Singapore, and Mr Abdul Rahim Kajai, known as the father of Malay journalism.

The romanised version of Utusan Melayu, Utusan Malaysia, started printing on Sept 1, 1967.