Oldest Malay Daily 80-Year-Old Utusan Shuts Down, 800 Workers Out of Jobs

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Utusan Melayu (Malaysia) Bhd announced its immediate shut down today, with no more publications for the indefinite future.

The decision was made as Utusan was no longer able to shoulder its debts accumulated over the years, estimated at between RM240 million and RM340 million.

More than 800 employees have been laid off, effective October 31.

Workers are technically on a month’s leave until the end of October, when another briefing will be held to inform them of the final decision as to their fates.

Some may be offered jobs at the new company, Dilof Sdn Bhd, that had earlier obtained permits to print Utusan Malaysia and Kosmo!

The management earlier today announced the shut down in an internal memo to staff.

In the memo, its executive chairman Datuk Abd Aziz Sheikh Fadzir said the Malay daily had faced a critical phase.

“The company also went downhill after May last year,” he said.

The company had taken various measures to revive itself into a stronger position, including offering Voluntary Separation Scheme to more than 700 employees.

He said the company also resorted to selling the group and company’s assets to improve cash flow.

“However, the plummeting circulation of Utusan Malaysia and Kosmo! as well as the failure to achieve a target of RM4 million revenue from advertising had placed the company’s cash flow in a more dire state,” he said.

Abd Aziz said the company could not pay salaries on time and is also facing various legal actions due to unpaid debts.

“With that, Utusan board of directors on Oct 7, approved a suggestion to implement a Creditors’ Voluntary Liquidation proposal and at the same time consented to the appointment of UHY Advisory (KL) Sdn Bhd as Interim Liquidator.

He said the board of directors had to take this action as they were of the view that the company is insolvent and can no longer run the business.

Abd Aziz said employees were requested to pack their belongings and return all the company’s properties, including access cards and office keys, to their respective heads of department by 1pm today.

FMT

“If necessary, the company would extend the access to employees to tomorrow (Oct 10) from 9am to 6pm,” he said.

After that period, the access to the company would only be given to selected employees.

Any compensation on the termination would be based on what was stipulated by the law and will be handled by the liquidator.

He said a briefing would be given to all employees by the liquidator at 3pm on Oct 30 at Dewan Besar Utusan.

Utusan Malaysia National Union of Journalists chairman Taufeq Razak in a press conference later said that staff felt confused as they had no chance to ask questions and receive an explanation about their future.

“The way Utusan chose to inform us is inhumane. They did not give us any kind of notice,” Taufeq said.

He said this morning none of the higher-ups showed up at the headquarters, leaving it to the department heads to talk to the staff.

“We don’t know when they will pay us – our salary for September is still on hold. We don’t know what kind of compensation we’ll get.”

Taufeq said the daily is ceasing operations because Utusan’s building had been confiscated and the liquidators were present to ensure the company closes as smoothly as possible.

Since Utusan started facing issues last year, Taufeq said NUJ had been trying to get Umno to let go of its shares because they had expected something like a shutdown to happen if Umno is still involved.

“We have tried to beg the Utusan higher-ups for a long time to break ties with Umno so that we will not be under its political influence,” he added.

Taufiq said the Utusan Malaysia NUJ chapter tried to meet with the company’s executive chairman Abdul Aziz Sheikh Fadzir several times but he kept postponing the meeting.

“We called, we sent messages but every time we spoke to him, he would give promises and then he would break them. From one date to another, he kept postponing.

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“Such a coward for not having the guts to meet us and discuss the company’s future. We are all confused.”

The Utusan Melayu group had been planning a second round of staff termination this month, leaving skeletal editorial teams for the company’s flagship publications consisting of a total of 70 journalists.

Utusan, the country’s oldest Malay language daily, started as a Jawi daily in Singapore in 1939.

The paper, often criticised for its uncomplimentary coverage of opposition leaders during the Barisan Nasional rule, announced several restructuring measures following the change of government in May 2018.

At its height, the company employed 2,000 people, including some 500 editorial staff.