PETALING JAYA • Employees of Malaysia's Utusan Melayu group were told to pack up their belongings and leave the office by 1pm yesterday as the cash-strapped company officially ceased operations.
The publisher of Bahasa Malaysia daily Utusan Malaysia, one of the country's oldest Malay-language newspapers, was owned by Umno until the Malay nationalist party lost last year's general elections. It also published the tabloid Kosmo!
Group executive chairman Abd Aziz Sheikh Fadzir said poor cash flow, mounting debts and declining sales led to the board of directors on Monday approving the creditors' voluntary liquidation proposal and appointing UHY Advisory (KL) as interim liquidator.
"This step had to be taken because the board of directors were of the view that the company is no longer solvent to continue business.
"For that reason, the company will cease operations on Oct 9," said Datuk Abd Aziz in a statement.
He said that Utusan had, for the past few years, gone through its most critical business period since it started operating 80 years ago.
The situation worsened after May last year, he said, when the Umno-led Barisan Nasional lost the general election for the first time.
Among the steps taken to improve the company's bottom line were to offer the voluntary separation scheme which saw more than 700 workers being let go, he said.
The company has also sold off assets to generate sufficient cash flow. "However, the declining daily circulation of Utusan Malaysia and Kosmo! and the target of RM4 million (S$1.3 million) advertisements per month which we failed to achieve caused Utusan's cash flow to become more critical," he said. This not only caused the workers' salaries to be delayed but also created more debts, he added.
Meanwhile, a representative for Utusan at the National Union Journalists said the company's owners have failed to face their employees to explain the situation following the decision to liquidate it.
"They have all run away. They are all cowards - with no guts to tell us whether they will pay us compensation or our due salaries," said Mr Mohd Taufek Razak, a journalist with the company.
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.
THE STAR/ASIA NEWS NETWORK