Page 1 of 2 Malaysian media mogul's big China bet By Chin-Huat Wong
KUALA LUMPUR - A giant global Chinese-language media conglomerate could emerge
as early as next year, with 5,000 media-related staff putting out five daily
newspapers and 30 magazine titles. Its editorial vision is to unite socially
China's far-flung diaspora and promote Chinese culture and civilization around
That's at least the vision of Malaysian timber-cum-media tycoon Tiong Hiew
King, who on January 29 proposed merging his trans-
Pacific Ming Pao group with two Chinese-language Malaysian media groups, Sin
Chew Media and Nanyang Press.
The three media groups had a combined market capitalization of RM1.4 billion
(US$400 million) when the proposed merger was announced, and under the proposed
structure Ming Pao would serve as the parent company and Sin Chew and Nanyang
as its wholly owned subsidiaries.
Tiong, who is already in control of more than 85% of Malaysia's
Chinese-language media market via Sin Chew and Nanyang, says the merger is a
strategic reaction to three major trends that have challenged the region's
traditional media: globalization, new media, and the rise of China. And while
the merger would no doubt justify a consolidation of reporting resources, more
broadly he believes the merged entity will result in "a media network that
belongs to the Chinese of the world".
When it comes to Chinese-language media, Tiong knows what he's talking about.
His Ming Pao Enterprise Corp currently publishes the fourth-best-selling
newspaper in Hong Kong, Ming Bao, and its sister newspapers in New York, San
Francisco, Toronto and Vancouver. He started off with the Sin Chew group, which
currently owns the top and third-best-selling Chinese-language dailies in
Malaysia and distributes sister newspapers in Indonesia and Cambodia. Last
October, Tiong officially acquired Nanyang Press's controlling stake after a de
facto takeover of his previous rival.
Some media watchers are already questioning the economics of the deal, which
entails Nanyang delisting from the Kuala Lumpur stock exchange and Sin Chew
becoming the first dual listing of a company in both Malaysia and Hong Kong. Sin
Chew shareholders are scheduled to receive an exchange of 3.3 new Ming Pao
shares - valued at HK$2.7 (34 US cents) - for every Sin Chew share (RM4), while
Nanyang shareholders would get 3.47 new shares of the merged entity for each or
their current shares (RM4.2).
Some media watchers contend that the arrangement will disadvantage minority
shareholders, especially those in Ming Bao, particularly considering that all
three media companies suffered declining financial performances last year. The
worst performer, Nanyang, registered a loss of 6.4 million yuan for the
financial year that ended last June.
Yet so far the market has responded positively to the idea of a global
Chinese-language media conglomerate, pushing up Ming Pao's shares by more than
15% the day after the merger proposal was announced. Those investors who
apparently sensed that a big move was imminent had already driven up Ming Pao's
shares by 33% between January 11 and 12 this year.
So far there has been no major resistance to the proposed deal, though the fact
that Ming Pao is incorporated in Bermuda would seem to violate a government ban
on foreigners owning Malaysian media. If it becomes a reality, Tiong's merged
entity will be the largest Chinese-language media conglomerate in the world
outside mainland China or Taiwan. And, according to Sin Chew executive director
Rita Sim, Tiong's media vision will not be confined to print, but will soon
move into television and radio.
From pulp to paper
With a global timber business spanning four continents, including interests in
Russia, Brazil, New Zealand, Gabon, Equatorial Guinea, Indonesia, Vanuatu and
Papua New Guinea, and affiliated interests in banking, fisheries and
infrastructure, the 73-year-old former rubber-tapper was recently ranked by
Malaysian Business as Malaysia's ninth-richest man.
According to a 2004 report from environmental group Greenpeace, Tiong's 60-odd
inter-linked companies control more than half of Papua New Guinea's large-scale
commercial logging operations, accounting for more than 55% of the country's
total log exports. He also runs an English-language daily there, The National,
which some note seldom reports on Papua New Guinea's logging industry and
touchy deforestation issues.
Greenpeace campaigner Dorothy Tewkie has accused Tiong's Rimbunan Hijau group
of having "an appalling record of human-rights abuses, environmental crime and
forest destruction in many countries across the world". The environmental group
alleged that Tiong's business empire has been protected by "an extensive and
well-established network of political patronage and media control" both at home
and abroad. Tiong has consistently denied the charges.
Tiong first diversified into media in 1988, when he was invited to revive
Malaysia's Sin Chew Jit Poh by its employees and senior leaders of the
ethnic-Chinese community. The once-vocal Chinese daily newspaper had been
closed down by then prime minister Mahathir Mohamad during his infamous
"Operasi Lalang" crackdown, which resulted in the detention of 107 political
dissidents. The revived publication played on its critical and persecuted past
to build up a new liberal profile.
Profits from the paper were astutely channeled into local Chinese charities and
cultural activities. One particular activity presaged Tiong's global vision of
promoting Chinese culture abroad. In 1991, Sin Chew launched the Hua Zhong
literature award for local Chinese writers. The prestigious award was later
opened to Chinese essayists, novelists and poets worldwide in 2001. Renowned
Chinese writers and intellectuals, including Wang An