Who can survive the CEO chair at Star Media Group?
by The Hammer
As it happens, there is no hotter seat in corporate Malaysia than heading Star Media Group (SMG).
In recent years, the spate of departures from the “Made in Penang” miracle tabloid that has ruled as Malaysia’s number 1 English daily, is alarming to put it politely.
Amidst so many leadership changes over the last six years he has served as Chairman, the man undoubtedly in the eye of the storm is Dato’ Fu Ah Kiow (picture) who inherited legacy issues the day he joined.
Fu, aged 71, is a seasoned career politician, having served as Deputy Minister at various ministries and has been Chairman of the Board and an Independent Non-Executive Director since early 2014.
He is also the Chairman of Finance Committee and Remuneration Committee for SMG. He has been exercising his full authority in making key decisions and sometimes overriding or reversing past strategic decisions by respective company heads.
Fu was appointed by Huaren, an investment arm of political party MCA, which owns 43% of SMG.
In one case, a proxy to Fu, exercised poor judgement by undoing compliance measures and giving false market info to Fu resulting in irreversible losses to one substantial subsidiary within a year.
Obviously, not many staff like his style nor do many irate shareholders.
Who’s the next in line for the top job at SMG?
You guess is as good as mine.
While the new government has been busy replacing, adding, or filling leadership positions in GLCs, the opposite seems to be the case at the Star Media Group. History does not lie…
The company has seen 3 CEOs resigning from the parent company and its subsidiaries as well as 3 COOs.
The big names included radio icon Kudsia Kahar from Star Radio, who took SMG to industrial court in 2015 before the case was settled in 2018.
The COOs were Calvin Kan and Roy Tan, both long time industry players.
But the biggest name was Datuk Seri Wong Chun Wai who announced his “retirement” two years before his contract ended.
The award-winning journalist was CEO of SMG from 2013-2018. He has been in The Star for over 36 years.
Group Chief Editor Datuk Leanne Goh and Chief Revenue Officer Lim Bee Leng also walked away from their posts.
After Chun Wai retired, a three-man committee headed by Fu spent nine months to look for a successor before settling on Andreas Vogiatzakis.
But CEO Andreas Vogiatzakis left just nine months into the job, the same time it took to find him!
Earlier, CFO R. Ragesh quit after 25 years in the Group. He was quickly replaced by Sam Au Chen Sum, from another public listed company of which Fu is a Director.
Senior Group GM for Group Marketing Christine Chang resigned last week.
Before Andreas, Wong Eng Teng, who is Chief Officer of Ecosystem Implementation Company at Prudential Services Asia opted out before signing his letter of acceptance.
In the least 2-3 years alone, Directors Datin Linda Ngiam and Mr Lew Weng Ho have quit their positions on the board.
Now the word is the current board is not keen to look for a media-related candidate after the fall out between Fu and ex CEOs.
While there have been shareholders who says a newspaper must be run by a true-blue newspaper person, they forget Tony Fernandes (who is said to be rejoining the Board) was not a pilot when he bought AirAsia with a shiny ringgit coin on the greens of the KLGCC, now TPC Kuala Lumpur.
Some previous CEOs like Roy Tan and until recently Andreas Vogiatzakis may not have ink in their veins, but they knew how to make the media business profitable which is the main demon that is haunting the newspaper business. They brought strategic, creative, critical thinking and management skills to SMG.
For the time being, the next annual general meeting is set to be a stormy one as SMG’s profits have declined gradually from 2015.
The first financial loss of SMG has now been registered and it can be tracked back to some overpriced purchases of media companies by the previous leadership.
The core issues seem to be the role of Dato’ Fu Ah Kiow and the loss making Dimsum.
To be fair to Fu, when he took over in 2014 SMG had gone through a rough patch with mushrooming competing digital news portals distributing free news.
He also disposed profit-lethargiccompanies companies like LITV, Capital FM and Red FM.
The core of the losses is its video on demand platform, Dimsum, which has cost SMG at least RM100million. It is believed the loss was heaviest in 2018 and 2019.
Latest Financials for 2020 indicate a 1st Qtr loss of almost 4 million (see table).
How to make money in the age of Digital?
The answer lies in thinking creatively but most newspaper types only know how to do a story or think selling ads or page inventory is about back slapping advertisers at the nearest pub or karaoke. WRONG!
The new challenges are sponsored content, customised stories, and using data to refine and improve content offerings, or listening to what the data is saying and acting accordingly. Most newspaper men of old have no clue about big data, consumer targeting, and all the growing possibilities of digital that surprise us ever day. So instead of blaming the leaders or taskforce, one should get into a new way of looking at things: BIG DATA.
Sparks are expected to fly with angry shareholders demanding to know the reasons behind the spate of top-level executives leaving and the plunge in profits, caused by its video on demand platform Dimsum.
But one shareholder spoke up for minority shareholders and SMG staff by filing a formal complaint to Securities Commission, Bursa Malaysia, Registrar of Companies and the Minority Watchdog Shareholders Group.
The complainant asked why top management professionals have resigned and left a vacuum leaving the independent board of directors to steer the Group in competitive uncharted waters.
But this complainant has now been gagged by a legal letter.
It learnt another complaint was also filed in Bahasa Malaysia to the Labour Department by staff of SMG, who feared they would be retrenched soon.
Fireworks are expected to fly at the coming AGM on June 22.
But I won’t be holding my breath. A retrenchment exercise and Mutual Separation Scheme is expected to be announced soon, affecting hundreds of SMG staff.
If the game of musical chairs does not stop, the staff of SMG will find the chairs taken away by their competitors in the advertising and media industry.
The post-truth era has already given publishers painful lessons to live with. So don’t get me stared on the likes of Google and Facebook.
One thing is for sure: we are all Fu**ed.
The scribe was a weekly contributing columnist for The Star for almost nine years writing about media, marketing and advertising issues. Almost all proceeds from his Sledgehammer column went to the Home of Peace, a sanctuary for underaged females from troubled homes.
This article first appeared in last Friday’s issue of MARKETING WEEKENDER. You can also receive your very own free copy of WEEKENDER every Friday. Just save 0122052588 under the name Ham in your phone and WhatsApp him the word “WANT”. This Friday’s issue will sizzle, be the first to receive!