Cheong Yip Seng, the former editor-in-chief of the Straits Times, has quietly appeared* at Hong Kong’s South China Morning Post with no notice about his role, mission or existence, leading to speculation that the Singapore-based Straits Times could be interested in a buyout. Cheong has told people he is there as a consultant for three months.

That is causing considerable angst in the city room. That state of uneasiness was exacerbated by the unannounced arrival of three former employees a year earlier of The Star tabloid of Kuala Lumpur, which is owned by the Malaysian Chinese Association and very much toes the company line.

The lead person was Steven Tan, the former executive deputy chairman of The Star, who was made chairman of the SCMP's executive committee. Reportedly one of the highest-paid executives in Malaysia, Tan was tasked with business growth and improving the share price, while his two lesser appointees were to reform editorial. The two editorial advisors are expected to leave shortly, having made no impact. Tan’s status is unclear.

The South China Morning Post, one of the most influential newspapers in Asia, has been in a state of unease since Reginald Chua, the former deputy managing editor of the Wall Street Journal, left abruptly after the Malaysians were brought into the paper without consulting him. He was followed out the door shortly after by his second in command, David Lague. Cliff Buddle has been acting editor in chief since that time but has not been named officially to the top post.

Silver lining in Singapore interest?

Malaysian sugar tycoon Robert Kuok Hock Nien bought the newspaper from Rupert Murdoch at HK$8 per share in 1993, reportedly as a favor to the Chinese government to keep it in safe hands. It was seen then as a master-stroke by a Beijing-friendly tycoon who would reshape the internationally respected broadsheet for mainland distribution and growth. Kuok already had substantial real estate and hotel holdings throughout China when he bought the paper. Eighteen years on, the share has fallen to HK$1.40 with no China play and a dogged editorial independence which irritates the Hong Kong and Beijing authorities.

Singapore Press Holdings (SPH), which owns the Straits Times, is cash-rich with the near monopoly it enjoys in the city-state. There is very little option to invest in media entities in tiny Singapore. Newspapers are a political sacred cow in most Asean countries. Foreign investment is unwelcome.

Hong Kong is an open media environment. SPH could well consider the SCMP a good buy as its share is grossly underpriced. It has good upside potential if China access can be engineered.

Could SCMP distribute on the mainland?

As Rupert Murdoch did by removing the BBC channel from STAR TV, the SCMP has to become politically acceptable’ for access to the mainland market. Cheong Yip Seng knows how to make the SCMP acceptable to both the Hong Kong and Beijing authorities. Indeed, given the opportunity, he could even embed ex-State intelligence officers as senior editors on staff - as the Straits Times has done for years under his editorship.

There is also an ample pool of Singaporean sub-editors and section editors nearing retirement who can easily be imported to replace the Western expatriates at the SCMP.

It was during the editorship of ex-Wall St Journal editor Robert Keatley that Kuok discovered the unfamiliar situation of owning a business without the ability to dictate policy to his underlings. After lashing Keatley in private for an unflattering SCMP report on a delegation of Hong Kong tycoons visiting Beijing at the invitation of the PRC President, the angry owner followed up with a signed two-page letter as well.

That was probably intended to secure Keatley’s resignation - which would have somewhat mollified the Beijing authorities and saved Kuok’s face. The editor took that as another irate reader’s displeasure with the paper’s reporting and published the proprietor’s letter in full in the Letters Page, acknowledging him in the editor’s note as chairman of SCMP. Keatley went on to serve his full contract term.

It hasn’t helped that senior SCMP journalists come from newspapers in the United Kingdom, Australia and the United States where reporting freedom and editorial commentary is taken for granted.

The paper has dumped a long series of political reporters and editors dealing with China, in particular Willy Wo Lap Lam and Mark O'Neill. It has always been very much an establishment newspaper, particularly in its coverage of Hong Kong's tycoons. The paper's top job is equally precarious. One senior editor said he had served under six editors in just eight years.

But Hong Kong has a 5 percent English-language literacy. Its education system does not generate sufficient English-fluent graduates. The English-language press in Hong Kong has long depended on generations of Western expatriate reporters and editors.

That long tradition makes the English-language press here stand out qualitatively from the press in Singapore, Malaysia, Brunei and other Third World countries with compulsive government meddling in media. Hong Kong has also been the preferred base for the Asian editions of the Financial Times, Wall Street Journal, International Herald Tribune and Time magazine among others.

It served a signal lesson to Kuok of the perverse nature of the media as a business. The 108-year SCMP tradition of editorial independence is too entrenched. Kuok has been trying to sell his SCMP holdings since. It does no good for his relationships with Beijing and casts a shadow over his considerable commercial interests.

Exit opportunity missed

There was a golden opportunity in 2000 when PCCW was rumored to have offered HK$12 a share as a content play for its mobile ambitions. Kuok was badly advised to decline by an ex-JP Morgan stock merchant he had hired for the purpose. This corporate advisor conjured the mirage potential of HK$24 per share by boosting spend on digital initiatives. That turned out to be fool’s gold. The opportunity to exit with profit was lost.

It is a remarkable tribute to Kuok’s standing and respect that Beijing has not targeted his business interests the way Jimmy Lai had to surrender his stake in Giordano stores across China. They have also not strong-armed SCMP advertisers the way Apple Daily advertisers have been spooked in Hong Kong.

The Sinification of Hong Kong

The SCMP is a window to Hong Kong and China for the rest of the world who cannot read Chinese. The paper has disproportionate influence on news agencies and Western journalists based in Hong Kong - which, as the PRC asserts itself on the global stage, must matter.

Furthermore, the grudgingly conceded direct election of the Hong Kong Chief Executive in 2017 by universal franchise is a worrying factor for the party. It will have every reason by fair means and foul, to silence or diminish alternative media channels. RTHK has already seen the replacement of its director by a bureaucrat with no media background. ATV is in mainland Chinese ownership. TVB will be next. The South China Morning Post projects internationally. It cannot be ignored.

So there is a natural alignment of interests between the players. Whether the paper can survive its lobotomy by doctors from Singapore will be an interesting case-study. Will China access finally drive up the share price? It probably will, given the speculative venality of fund managers and bullishness of China advertisers. And Kuok can finally escape from the one investment he deeply regrets.

That may open up space for online portals to benefit from whistle-blowing service to readers.

"Clarification: A previous version of trhis story indicated Cheong had been hired by the SCMP. He is on a three-month contract.