Chinese media merger harms competition in Malaysia and abroad

alerts-button.jpgThe Southeast Asian Press Alliance (SEAPA) is concerned about a proposed tripartite merger of three media groups in Malaysia and Hong Kong, all owned by Malaysian tycoon Tiong Hiew King, which will create the largest Chinese publication group outside of China and Taiwan.

On 30 January 2007, Malaysia-based Sin Chew Media Corporation announced its intention to acquire Hong Kong-based Ming Pao Group and invited another Malaysian company, Nanyang Press Holdings, to join the merged entity.

SEAPA shares the concerns of its Malaysian partner, Centre for Independent Journalism (CIJ), that the consolidation, which is projected to produce a circulation of more than one million, may curb competition and pluralism in Chinese media accross countries where the three newspapers have a combined presence – namely, Malaysia, Hong Kong, the United States, Canada, Indonesia and Cambodia.

The merger may also subject Chinese readers to more political control in the countries concerned and abroad, CIJ said.

“If the consolidation of Tiong’s media empire is aimed at China’s market (as reported), there is also a concern that these newspapers will protect and advance the interest of People’s Republic of China. This will exacerbate worries about domestic political censorship, at the expense of freedom of expression and information, which could be catastrophic to countries where the voices of media and citizens are already censored and controlled, such as Malaysia,” CIJ said in a 6 February release.

Politically, CIJ further noted, such concentration of media ownership “poses a serious threat to freedom and good governance”.

“Media tycoons can use their political leverage to bargain on behalf of their commercial interests, paving way for socially or environmentally disastrous business projects and concessions. These might otherwise be checked by public opinion,” it said.

Yet even the effectiveness of public opinion as a check in a democratic system can be jeopardised when it is subsumed by the concentration of power. As Australia has shown, CIJ pointed out, “it can lead to legislation that supports large media corporations over guarantees of competition or access”.

Another danger is that, with growing interests at stake, media conglomerates become more susceptible to censorship pressures from the authorities, CIJ said, citing the submission of Internet giants Microsoft, Yahoo and Google to Beijing’s dictates.

Shareholders of the two Malaysian companies involved in the merger are expected to vote on it in meetings in the fourth quarter of 2007. CIJ is urging them to oppose the deal and has asked the Securities Commission to investigate it with consideration to “consumer interest, freedom of expression and foreign control of local media”.

CIJI has also challenged Tiong, who had claimed that his media company opposed the restrictive Printing Presses and Publications Act (1984), “to advance the agenda of media law reform in Malaysia” and start a public debate on the prohibitive entry conditions into the media industry.

Barring any objections from the shareholders, the merger is expected to conclude by 28 February 2008, and would end with the new media tycoon owning about 53 percent in the new Ming Pao, with Huaren Holdings, the other substantial owner of Nanyang Press, holding 3.5 percent.

BACKGROUND:

Sin Chew publishes two major Chinese-language newspapers in Malaysia, “Sin Chew Daily” and “Guang Ming Daily”, while its former rival Nanyang Press publishes the other two mainstream dailies, “Nanyang Siang Pau” and “China Press”.

Nanyang Press fell into the hands of Sin Chew’s Tiong on 9 October 2006, when he bought a 21.02 percent stake from Huaren Holdings, the investment arm of a ruling political party, the Malaysian Chinese Association (MCA). The deal ignited protests from local human rights groups and civil society, who were already up in arms over the political party’s takeover of Nanyang Press in 2001 and had predicted the unfolding of the present scenario.

Sin Chew has previously denied involvement in both the 2001 takeover of Nanyang Press by the political party, with which its owner Tiong has close ties, as well as moves to monopolise the Chinese press in 2006.

Tiong now holds 44.8 percent of Nanyang Press and has extended a mandatory general offer for the remaining shares. By March, he is expected to have a stake of more than 50 percent in Nanyang.

The Hong Kong-based Ming Pao, which Tiong took over in 1995, is the holding company of “Ming Pao Daily News” and “Ming Pao Weekly”, sold in Hong Kong, Toronto, Vancouver, New York and San Francisco.

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