PETALING JAYA: Star Publications (M) Bhd will redevelop its former headquarters site in Section 13 here to house both an expanded campus of Universiti Tunku Abdul Rahman (Utar) and the publishing group's three radio stations.
In a statement today, Star Publications said it was working with Utar on a proposed new city campus of up to 650,000 sq ft at the same location to accommodate the university's growing student population.
"Utar has expressed to us that the current old premises of 77,200 sq ft is inadequate for its expansion plans. Under the proposal, Star Publications and its joint-venture partners will bear the full costs of construction.
"Utar will in turn take a long-term lease on the buildings at a rate to be finalised. Star Publications intends to also build an office block to accommodate its three radio stations which are currently leasing rented premises," it said in the statement.
Star Publications said it was correcting "misleading reports" in the Chinese press that it intended to terminate the tenancy of Utar in order to develop the land, calling them "mischievous for certain quarters and Chinese papers to make a political issue out of the matter".
The tenancy for the premises expires in May 2010. Star Publications said it and Utar would want the full completion of the tenancy.
It added that discussions were ongoing and the next meeting between its management and Utar's vice-chancellor and registrar had been scheduled for today.
Star Publications said the original plan by the previous management was to build a university block as well as a convention and exhibition centre at the site.
It added that it was the new management which scrapped that plan and earlier this year, initiated discussions with Utar on the possibility of building a full-fledged university campus under a long-term collaboration.
Meanwhile, sources told Chan Kok Leong that the media company was currently on the lookout for a "reliable developer" for the proposed redevelopment that could have a gross development or sales value (GDV) of RM370 million.
"Star Publications has more than RM700 million in cash, but it prefers to pan out the development as construction is not its core business," a source said, adding that in exchange for the development, Star would get 30% of the GDV. Star is also expected to sell "various properties valued at around RM110 million", the source said.
Speaking to reporters after delivering his speech at a World Chinese Economic forum here today, MCA president Datuk Seri Ong Tee Keat fended off allegations of "personal interest" in the matter.
"I think the media need to check their facts before making any assumptions. I believe Star will make the proper clarifications on this soon," he said.
Several reports in the vernacular newspapers hinted that the redevelopment of Star's property in Section 13 was "not made solely on business considerations".
According to MySinChew.com, the hasty decision to dispose of the Utar site "has something to do with the ongoing MCA infighting".
The report also linked Star deputy executive chairman Datuk Clement Hii and another executive director Ng Beng Lye to Ong and suggested that the duo were trying to push the deal for fear that Ong may not be in office for too long.
The report also said the two directors had so much power that "it could take back the Utar site, without having to consult the MCA central committee".
MCA's investment arm Huaren Holdings Sdn Bhd holds 42% of Star.
Star Publications turned in a net profit of RM32.6 million in the third quarter ended Sept 30, down 16% from a year earlier as a result of the economic slowdown. Revenue, however, improved to RM243.8 million against RM203 million previously.
The group's cash balance and cash equivalents for the period ended Sept 30, 2009 were RM750 million, an increase of about RM130 million from Dec 31, 2008.
This article appeared in The Edge Financial Daily, Nov 17, 2009.
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