Thanks to promise of freedom of press, the new government of Pakatan Harapan has allowed “Utusan Malaysia”, the oldest Malay newspaper to operate after the historical May 9 general election. But things would not be the same for the highly controversial newspaper, which was founded as “Utusan Melayu” in 1939, way before the country’s independence in 1957.

 

As the gravy train stops on the night of May 9, Utusan scrambles like a headless chicken to survive after its owner suffered a humiliating and stunning defeat. UMNO Malay nationalist party, the backbone of the defeated Barisan Nasional coalition government, has a 49.77% controlling stake (as of annual report ended 31 Dec, 2017) in the newspaper.

 

As the mouthpiece of UMNO, Utusan played an important role as the biggest influencer in shaping the racism and extremism among the 68.8% of Malays and Bumiputeras in the country of 32-million populations. The newspaper’s task has been stoking racist sentiments with provocative headlines championing Malay supremacy and special rights.

Just one day after the 2013 general elections, in which the ruling Barisan Nasional (BN) coalition suffered its worst-ever results, Utusan published a highly racist feature article with the headline “Apa lagi Cina mahu?” (“What else do the Chinese want?”). It accused ethnic-Chinese of trying to overthrow the Malay-dominated government – calling them “ungrateful”.

 

Ironically, 5 years after condemning the Chinese, it was the Malays’ turn to vote out the ruling Barisan Nasional in droves. Utusan management and staffs were dumbfounded and panicked. For the first time in their career, the sight of losing their rice bowl has become a reality. Amusingly, unlike The Star newspaper, which is owned by MCA (another component party of BN), Utusan refuses to change.

 

While English newspaper “The Star” has immediately taken a U-turn to become a more neutral newspaper after ex-PM Najib Razak lost his throne, Utusan has chosen to continue its extremist and racist view in reporting. It continues to spew hatred against the new government Pakatan Harapan while worshipping UMNO.

Yesterday (Aug 1), the Malay newspaper was given what appears to be – the beginning of the death – when the Education Ministry instructed schools, tertiary institutions and other institutions under its purview to cease its subscription of the UMNO-owned newspaper. The Education Ministry official cheekily said – “This is to cut cost as nowadays, the same news can be obtained online.”

 

Utusan Malaysia’s circulation peaked at 350,000 copies a day in the 1990s and it was one of the largest selling newspapers in Malaysia. However, its circulation had declined to about 250,000 copies in 2004 and further down to 144,438 copies in first half of 2016. According to ABC’s Audit Report, the number plunged to 112,050 copies during the period of July – Dec 2017.

 

There were multiple talks about a merger and acquisitions, including one involving the merger between the New Straits Times Press and Utusan Melayu in 2006. It never took off. One of the stumbling blocks was the “independence of Utusan Malaysia” as the Malays shared strong sentiment for the oldest Malay newspaper in the country.

But it won’t matter now, would it? Utusan’s stock price has been reduced to penny stock, currently trading at RM0.21 (US$0.05) a share. Yesterday, the newspaper reportedly has defaulted on a RM2.9 million loan. It was supposed to settle the loan – owed to Affin Islamic Bank – on July 31. Without injection of cash from UMNO, the newspaper’s financial will only get worse.

 

Utusan is one stock that an investor must avoid with a 10-foot pole. The company has been registering losses for years with zero gross dividend and negative EPS (earnings per share). Its reserves of RM169 million in 2013 were totally wiped out by 2016. For the financial year 2017, Utusan has negative RM65 million reserves – hugely in debts!

 

Things had gotten so bad that by 2016, non-executive staff of Utusan group were hit with late salary payment. The management, while dismissed the company was in financial trouble, had also urged and begged the Malay community to give its full support to what it said is the last remaining newspaper company that represents the so-called Malay struggle.

But even before the stunning loss on May 9, UMNO has failed to stop Utusan’s continuous bleeding losses, despite arm-twisting government-linked companies to advertise in the company’s publications. Billionaire businessman Syed Mokhtar Albukhary, Utusan’s second largest shareholder, was equally helpless on how to help the UMNO’s mouthpiece.

 

A market watcher says – “Honestly, I don’t know what they (Utusan) can do. While there is a likelihood of getting government agencies to advertise or support Utusan, there is also a perception problem … so, who will advertise, meaning how will they make money?” The burning question is what else can UMNO do now that they hadn’t done previously to save Utusan?

 

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August 2nd, 2018 by financetwitter

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