The Malaysian Insight

SOME 800 former Utusan Melayu Bhd employees face the risk of not getting their full Voluntary Separation Scheme (VSS) settlement any time soon due to the company’s worsening financial situation, sources said.

The ex-employees have only been paid less than 6% of what had been offered since they signed the separation scheme at the end of last year, the sources added.

They said the company’s management blamed its inability to sell off the group’s assets for the failure and is asking for more time and patience.

In a previous agreement, Utusan had announced it would settle the VSS payments to its employees over a 12-month period as it had to sell off its assets.

In documents sighted by The Malaysian Insight, Utusan was supposed to sell 26 assets worth RM118,992,822, but only nine have been sold off thus far, making  RM11,908,826 in returns.

The financial crunch has seen the company being late in paying off its reparations to employees according to the stipulated date. It has made staggered payments, and last May, it could only afford to pay RM1,000 per employee.

“It only followed the agreement for payments in December 2018 and January 2019. After that, it’s been a mess. Payments are always late and some have even been paid half the amount,” according to a source.

“The latest is that the ex-employees have only been paid RM1,000 for May when the payment was supposed to be twice the amount. It gives them notice when payments are late and the ex-employees have to accept it.”

The source also revealed that although the Malay daily’s management said it had sold off nine assets, it had actual only received payments for one asset worth RM850,000.

“At this time, there are nine assets that have been agreed to be sold, but only one has really been sold and the payment for that was RM850,000.

“So, how are they going to pay the VSS?” said the source, adding only 5% to 6% of the total remuneration has been paid off.

Utusan has paid off RM21 million to date but still has to pay RM64 million more.

The former employees now fear they could still be in this position come 2020 and 2021.

Moreover, the ex-employees are also divided about whether to take legal action against Utusan for fear of unwanted complications.

“There are discussions to bring this to court, but there are those who worry that if a case is brought forward, the company could wash its hands off paying the remainder as the case goes on.

“As much as we can, we don’t want to go to court. We will negotiate and pressure Utusan to uphold and stick to its promise.” 

Another source said he was annoyed by the “chaotic” situation affecting the former Utusan workers.

“Utusan is willing to pay but not on schedule. We need the money to do business and other things, but Utusan treats us like this,” he said.

He said it was highly likely Utusan would not be able to pay the entire VSS compensation by the end of the year – as promised – and that payments would continue to be delayed until 2020.

“At a meeting three days ago, I was angry when I heard Abd Aziz Sheikh Fadzir saying Utusan could not afford to pay the VSS compensation at the end of the year.

“When he had given the VSS offer, he did not say the payment hinged on the sale of assets, and we feel that we have been cheated,” he said.

Aziz, the group’s executive chairman, had earlier this year acquired 35 million shares in the company, representing a 31.61% stake in the group. It is believed that he bought over shares previously held by Umno.

The company’s financial mess not only affects former employees but also Utusan staff, whose salaries have been delayed for some months.

An employee told The Malaysian Insight that on top of being delayed, they were also not getting their full salaries.

“In June, executive officers were paid RM1,000, and recently, they got another RM1,000. We do not know when we will get the full salary,” the employee said.

The group publishes Utusan Malaysia and Kosmo newspapers. – July 14, 2019.