that kuensel shall be privatized
The prime minister has said Kuensel will not go under DHI but should be privatized
Kuensel has voiced a strong preference to be fully privatized after the prime minister said the oldest newspaper will not be put under the Druk Holding and Investments (DHI) and instead welcomed feedbacks from Kuensel and the public on privatizing the paper.
Kuensel Managing Director Chencho Tshering told Business Bhutan that he would want the paper to be fully privatized by selling off the 51% government shares to the public.
“When Kuensel is owned by the government there is a tag with it that Kuensel is the mouthpiece of the government though we have never spoken for or against the government,” he said.
He added that there is privatization pressure on him from major private shareholders who own the majority shares.
Chencho Tshering said Kuensel should be privatized to enhance its reputation in the international and local market as foreigners reacted differently when they hear that is government-owned. “Even our colleagues in the private media assume that we are getting all the advertisements because we are government-owned but they don’t understand the readership and the reach of Kuensel.”
This, Prime Minister, Lyonchen Jigmi Y. Thinley, in response to a Business Bhutan query said Kuensel would not be put under DHI and instead it could be privatized by offloading the government’s 51% stake to the public.
The Prime Minister said, “As far as the government is concerned DHI is not the place where Kuensel belongs and what the government should do is to divest its holdings in Kuensel and completely privatize it.” He said the government would like to hear about this from Kuensel employees and also through public opinion.
Business Bhutan on its May 15 issue wrote about the possibility of state-owned enterprises like Kuensel, Wood Craft Center, Bhutan Agro, Bhutan Post, and the BDFC currently under the Ministry of Finance, being transferred to DHI after the cabinet instructed DHI to study the possibility of transferring these companies.
DHI, in its report, had highlighted Kuensel as one of the commercially viable companies which meant that it could be transferred in keeping with DHI’s commercial mandate. But Kuensel’s concern was on its implication on the editorial independence of the paper.
The Kuensel MD said the Business Bhutan article had clarified a lot of issues which people had not even thought about and made people more aware and care about the issue.
There, however, is also another view on Kuensel’s privatization.
A major private shareholder owning 1.47% of Kuensel shares, Phub Zam of Yarkay group of companies, said, “Financially, what I feel is that if it is for the income then it is always best to have some part of the company with the government as it will then always get the blue-eyed boy treatment while competing with the private papers. We won’t get that edge if Kuensel is fully privatized.”
The MD of Bhutan Times, Wangcha Sangay, whose family members have the largest private stake of 6.38% in Kuensel, said, “It doesn’t make a difference to us if Kuensel is with the government or is privatized but what we wanted was more representation for the private shareholders in the board of directors for Kuensel.”
There are few others who feel that a chunk of the government’s shares could be off loaded to Kuensel employees.
However, the Kuensel MD said that in 2006 when Kuensel’s 49% shares were floated to the public, the company had kept 10% of shares for the employees but only around 6 to 7% of the shares were bought as employees could not afford it.
Kuensel Editor, Phuntsho Wangdi, said an editorial policy would be the key to keep the editorial independent. He said the only major concern in terms of privatization is that private owners may not want to spend more resources on getting news articles.
Kuensel has a total of 233 shareholders with the government owning 51% while 20 other shareholders own 42.25% of the company. The largest of the private shareholders is the radio company, Kuzoo FM, owning 20% followed by the NPPF with 7.35%. Among private individuals, Wangcha Sangay and his family members own the highest of 6.38% followed by Ashi Kesang W. Wangchuck, Dasho Kinley Dorji, Dasho Tenzin Yonten, Phub Zam, Tobgyal Dorji, Wangchuk Dorji each holding between 1% and 1.47% of the shares.
kuensel facts:
Total face value of shares is Nu 50mn with 500,000 shares in total.
The paper was started by the government in 1967.
It has reserves and capital worth Nu 95mn.
It has Nu 24mn in cash at the bank.
It owns 3.6 acres of land in Thimphu with a market value of around Nu 156mn.
It declared a dividend of 12% for 2009.
It has 170 employees.
TENZING LAMSANG in Business Bhutan