KUALA LUMPUR — October 9, 2019: After 80 years of operation, Malaysia’s oldest Malay-language newspaper, Utusan Malaysia will close down today.
In an internal circular, Utusan Melayu Berhad executive chairman Datuk Abd Aziz Sheikh Fadzir, announced that the company will cease operations starting today.
Aziz said the shutting down of Utusan Malaysia along with its other titles, Mingguan Malaysia, Kosmo and Kosmo Ahad was due to the company’s cashflow problems that were exacerbated by declining revenue and circulation.
“The circulation for Utusan Malaysia and Kosmo has been declining and our failure to achieve our monthly advertising target of RM4 million has worsened the company’s cash flow.
“Not only that the company was unable to pay its staff, it also faces difficulties in paying its debtors from whom it is facing a myriad of legal suits,” read the circular sighted by The Mole.
The company’s dire financial state was first reported in August last year where it was classified at a Practice Note 17 (PN17) company, a classification denoting companies with inadequate financials that are at risk of being delisted from the stock market.
The company has been bleeding over the past few years, with its shareholders’ fund declining to RM89.9 million and with accumulated losses totalling over RM71 million as at the end of June last year.
However, two days ago, prominent Malay tycoon, Tan Sri Syed Mokhtar Al-Bukhary’s name popped up into the predicament that had plagued the company.
Utusan had, in an announcement to the stock exchange, said that it will sell a 70 per cent 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 (KDN) 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 Harian Metro newspapers.
In July, Aurora Mulia was reported to have bought Umno’s 11.09 per cent stake in Media Prima Bhd, according to the business newspaper Malaysian Reserve, which is also controlled by Syed Mokhtar.
In two more deals in July and August, Aurora Mulia raised its stake to 20.56 per cent.