Tuesday 1 October 2013

The business of MCA

Recently, the President of MCA proudly declared that under his leadership, since March 2010, the party made RM107 million. I like to share a few interesting analysis, comments and questions:

1. As can be seen from the dividend table below, only the 1st interim dividend of 2010 and the special dividend are subject to tax. This taxable dividend amounts to 55.4 Sen. Since Huaren and now MCA owns 313.3 million shares of Star Publications (M) Bhd, MCA received some RM173.6 million. At 25% tax rate, the tax savings of moving the ownership of Star to MCA was RM43.4 million.

During the three years since 2010 under the present President, MCA made a further tax savings of about RM700,000 a year from the rental income of Wisma MCA. So, we add another RM2.1 million.

Total tax savings from moving the assets of Huaren to MCA is RM45.5 million.  Now, where is the balance of the RM61.5 million from?

2. From 2014 onwards, all dividends paid will be single-tiered in Malaysia. In other words, moving The Star from Huaren to MCA generates no future tax savings.

The question is, why then is The Star brought under the direct control of the MCA leadership?

3. Since March 2010, Star Publications (M) Bhd has paid over RM693 million in dividends. MCA received RM313.13 million. Add this to the income from Wisma MCA, the party would have received over RM320 million income.

How is this money applied? MCA bought Menara Multi-Purpose for RM375 million in 2011. What is the amount of loan taken to buy the building? How much was paid in cash? It is safe to assume that the party has a very healthy bank account.

4. Since March 2010 under the present President, the stock price of Star Publications (M) Bhd has dropped from RM3.35 to RM2.40 presently (or by 28.4%). Unrealised capital loss for MCA is RM297.8 million!

During this same period, Bursa Malaysia’s Composite Index gained a whopping 33%.

Firstly, I was surprised that the President of MCA articulated on making money as a political party. But even if that was an objective, it actually lost almost RM300 million instead. To be kinder, adding back dividends paid, it broke-even.

Don’t get me wrong. I have no interest in MCA politics. As an analyst, the recent debates call for an analysis of the facts.  And in so doing, questions beg to be answered.


  1. at the current rate MCA is declining, it's hard to see them making a strong comeback in the next election. i see the focus seems to be on power grab and money grab on the rich resource the party has..

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  3. Great analysis! surprise you have started blogging. you was an inspiring mentor when I was at sunrise many years back

  4. Boss, no need to waste time explaining to the Most Confused (cocky) Adult.

  5. My observation is that ...MCA is blessed to have Dr Chua as its President. For the record he doesnt interfere the management of Star, UTAR or TAR College. He lets the professionals run the establishments. I find him to be a 'technically' clean character even though he is tainted with sex scandal. Visibly his possible act of cronyism is giving out small printing of t-shirt jobs to his lackey The 'Fat' Vincent (Not the Tan Sri). On the contrary within a short period of presidency Ong Tee Keat has hive-off key land parcels near Jaya One to his Meda/Andaman Boys. Bearing which the site is supposed to be UTAR Engineering Faculty. Comparatively Dr Chua is a great politician as many of you may not be agreeable with me. He is a modern day Charles de Gaulle fighting for his Third Republic.

    1. My article was an analytical view of the ongoing financial debates in MCA. As I said, I have no interest in MCA politics and hence, no interest in the quality and personalities of its leaders. Fundamentally, race-based politics is incoherent in a world where racism is increasingly outlawed.

  6. Money grap and power crazy is always on the mine of MOST politician if not u can always contribute in alot of ways why fight and fight, one big shot buying a number plate also scare to let the people know and one is bold enough to let people know he is the celebrated porn star in Malaysia I really admire their thick skin and the endurance to survive in this politic world

  7. MCA even sold land donated by the late Loh Boon Siew for them to build their next HQ. A party of no moral, therefore whatever they said cannot be trusted

  8. Dear Tong, Agreed your reply to Saigon KL. Race based parties only exist in uncivilized & Stones Ages.

  9. Again, no comments on the fundamental site as there is no such things as fundamental in Malaysia stock markets. Mca can use money to buy the most cunning n clever accountant to 'clean ' n syffon the money to many unnamed & untraced offshore account. One thing for sure, all this jokers will face the music on the judgement Day.