Friday, February 16, 2007

[Asia Times Online] Malaysian media mogul's big China bet

The following article is taken from Asia Times Online.

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 the world.

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 Yi, Chen Ying Zhen, Nan Fang Shuo, Long Ying Tai, Xi Xi and Tao Jie, have all attended either the award ceremony or other cultural events at Sin Chew's invitation.

Sin Chew soon thereafter overtook its longtime market rival Nanyang Siang Pao in circulation. The heated competition for Malaysia's Chinese-reading audience became a duopolistic standoff by 1992, when Sin Chew acquired Guang Ming Daily and Nanyang bought the tabloid China Press. But soon the two respected publications became embroiled in political factionalism, which some contend undermined their editorial independence. Under Malaysia's Printing Presses and Publication Act, the press is required each year to reapply to the government for a publication license, which may be revoked without official reasoning or judicial recourse.

When the factionalized Malaysian Chinese Association (MCA), the largest Chinese-based party in Malaysia's multi-ethnic ruling coalition known as the National Front (BN), split between its president and his deputy, Sin Chew's top management bet on the former while Nanyang sided with the latter. When the BN lost a by-election in November 2000, swung by the defection of ethnic-Chinese supporters over the state's high-handed handling of political activism and education policy, Mahathir blamed Nanyang and China Press for unjustly influencing the minority community's vote. Pressure soon mounted on Nanyang's owner, Quek Leng Chan, to sell off his media interests to MCA's investment arm, which was completed in May 2001.

Monopolistic ambitions

The takeover was widely and vigorously protested by Malaysia's Chinese community as an encroachment on press freedom, and Nanyang Siang Pao was later widely stigmatized as a government mouthpiece. Its circulation subsequently plummeted, a significant factor in the media organization's financial loss last year. Once Malaysia's largest Chinese-language daily, the publication, which has an 84-year history, now ranks near the bottom in readership surveys.

To many, the episode has spoken volumes about the editorial integrity of Tiong's publications. Not only did Tiong's Sin Chew newspaper not carry news of Nanyang's takeover and the Chinese community's visceral response, but the representatives sent by MCA's investment arm to run Nanyang temporarily after the takeover were former Sin Chew senior managers and editors. Sin Chew's perceived collaboration in the Nanyang takeover led to a mass boycott by more than 90 columnists and commentators of all four newspapers.

The four Chinese-language newspapers have allegedly since collectively filtered news and rejected public advertisements on issues likely to be perceived as sensitive to the MCA or Tiong's friends in government, from corruption scandals of primary schools to the economic plight of pig farmers. Significantly, such self-censorship was apparently not ordered by the Ministry of Information, as the news and advertisements were carried by its young rival, the Oriental Daily. From its inception, however, the Oriental Daily has encountered difficulty distributing through local vendors, who claim they would be denied supplies of Tiong's four publications if they carried the paper.

Tiong later gradually acquired Nanyang's shares from the MCA and by last October had taken a controlling 44.8% stake in the media company. That sparked a new round of protests against Tiong's perceived designs to monopolize Malaysia's Chinese-language press. About 250 students and concerned readers demonstrated on November 3 in front of Sin Chew's headquarters and two regional offices, and 120 former Sin Chew cadet reporters have come out to oppose Tiong's move toward media monopolization.

In light of that corporate history, Tiong's new global ambitions are already drawing parallels with Australian media mogul Rupert Murdoch, who famously went on a global media-buying spree and, in pursuit of high returns on his investments, has allegedly sacrificed the editorial integrity of many of the once-respected English-language media he purchased.

With an eye on China's enormous media-market potential, Tiong is apparently not bothered by the comparisons. At the press conference announcing the planned merger, Sin Chew senior executive Rita Sim vowed to maintain editorial independence for the individual newspapers while simultaneously pursuing "economies of scale, operational rationalization and market re-segmentation". But Tiong now seems more intent on winning over Beijing - rather than his critics - to his global media vision.

Rumors have recently circulated that Tiong held talks with Richard Li, the son of billionaire Hong Kong tycoon Li Ka-shing and the current chairman of PCCW Ltd, about acquiring a stake in Hong Kong's Television Broadcasts Ltd (TVB). Former Ming Pao insiders, on the other hand, say Tiong would more likely choose to deal with former People's Liberation Army colonel Liu Changle, who leads mainland China's Phoenix TV, a satellite television operator that beams its content to audiences in North America and Southeast Asia.

Tiong has made clear in interviews in Malaysia his intention to enter China's fast-expanding and lucrative media market. Any possible expansion, merger or partnership in China would likely require Beijing's approval, explaining perhaps in part Tiong's recent gung-ho pro-China message. Partly because pan-Chinese cultural nationalism is being evoked, and partly because Tiong's dominance now seems unassailable, his proposed merger announced last month has so far been better received by Malaysia's Chinese community than last October's seizure of a controlling stake in Nanyang.

A daily Sin Chew column ran a reader's letter on January 31 warning Tiong's media monopoly critics not to become "traitors" of the Chinese by opposing this "world-shattering" move. However, Tiong's bold move also likely means his critics will have even less space to air opposing views in Malaysia's monopolized Chinese-language media, and perhaps some day soon in other Chinese-language markets across the globe.

Chin-Huat Wong is a journalism lecturer in Malaysia. He is also the chairman of the Writers Alliance Media Independence (WAMI) formed in response to the Nanyang takeover in 2001.

1 comment:

hjkl said...

welcome to the wow gold, cheap WoW Power Leveling, service site,wotlk gold buy cheap wow gold,wow gold,world of warcraft power leveling buy wow gold