Internal Memo Says Utusan Malaysia Will Cease Operations Effective Today
Employees were asked to clear their desks by 1pm today, 9 October.
Utusan Malaysia has allegedly ceased operations today, 9 October, with its employees being asked to clear their desks by 1pm
According to an internal memo sighted by SAYS, employees were informed that its Board of Directors has approved a Creditors’ Voluntary Liquidation and appointed UHY Advisory (KL) Sdn Bhd as the interim liquidators.
The internal memo was signed by executive chairman Datuk Abd Aziz Sheikh Fadzir, stating that the company was "no longer solvent" despite several attempts to salvage the nation's oldest Malay-language newspaper.
"This was a necessary step as the Board is of the opinion that the company is no longer solvent to continue operations. Therefore the company will cease operations on Wednesday, 9 October 2019," Datuk Abd Aziz Sheikh said.
According to the memo, while the final working day for employees was 9 October, their employment would end on 31 October
The employees have until 1pm today to clean their work stations, pack up, and return all company property, including access cards and keys, to the office.
New Straits Times reported Utusan National Union of Journalist (NUJ) secretary Muhammad Basir Abu Bakar saying that no assignments were given to reporters and photographers for today.
"So far, the staff have not been formally notified by the management, but have only been asked to vacate their desks," he was quoted as saying.
Meanwhile, the memo stated that if there are any additional needs, entry approval will be given to staff on Thursday, 10 October 2019 from 9am to 6pm.
"After this time, access to the office will be limited to selected employees only. Your eligibility for termination of employment benefits is subjected to provisions of the law and will be managed by the liquidator," the memo read.
Datuk Abd Aziz explained that the company's financial situation had worsened since May 2018 and while efforts were made to place the company in a stable position, they have failed to materialise
"Among the steps that were taken included offering Voluntary Separation Scheme (VSS) that saw over 700 staff let off from their jobs. This was a large scale termination of employment that had to be done for the survival of the company.
"The Company has also strived to sell off the assets of the company and the Group to sustain capital and get sufficient cash flow," he said in the internal memo.
"However, the daily circulation rates for Utusan Malaysia and Kosmo have gone down and the advertising target of RM4 million a month could not be achieved, causing Utusan's cash flow to decline," he added.
According to him, the financial crisis kept getting worse as employees' salaries were not paid on time with debts also continuously getting delayed.
"This company is now faced with legal action from various creditors."