The audit has found that Malaysia International Franchise Sdn Bhd (MyFranchise), a Perbadanan Nasional Bhd subsidiary, to be “inexperienced” and this led to the closure of the outlets in Tokyo and London.
A plan to open a “fine dining” restaurant in New York was dropped while the Tokyo restaurant was operated by someone who filed “fake claims”, which had to be cleared by MyFranchise.
The Jom Makan restaurants - “quick service” in London, “specialty” in Tokyo and “fine dining” in New York - were to be prototype restaurants for the Malaysia Kitchen programme launched in 2006.
A government grant of RM20 million was given, but only RM16.4 million was used. The balance was returned to the Domestic Trade, Cooperatives and Consumerism Ministry on Feb 22, 2012.
The audit has found that the restaurants had failed because of “bad location, inexperience, a menu that was too wide, unreasonable prices, bad-tasting food and poor quality”.
In response, MyFranchise said it was given only two weeks to open up the restaurant in Tokyo, and as such could not scout for the right location.
Cheated another firm of RM280,000
The Tokyo restaurant changed managers several times, including one who used the restaurant to cheat another company of 7.3 million yen (RM278,904 as at December 2009 exchange rates).
“A claim was made to Cachette Co Ltd... using a fake document... and MyFranchise had remitted the payment made in full,” it notes, although it does not disclose the nationality of the errant manager.
The same manager also did not submit financial records and statements to MyFranchise, disabling the latter from monitoring the Tokyo restaurant's activities.
In response, MyFranchise said a complaint was lodged against the manager with Malaysian police in 2009, but it chose not to take civil action in Japan as it was too expensive.
MyFranchise said the financial statements were at first handled by an accountant, but the accountant refused to continue to work as the errant manager did not pay the acountant's fees.
“This was resolved after a new manager took over... No civil action was taken in Japan, as legal costs were too high - at an estimated RM2 million,” the company said.
MyFranchise was also paying for the parking costs of a Jom Makan van in Hanakoganei, just outside of central Tokyo, even after the restaurant closed.
Dormant company directors still paid fees
In response, the company said the van has now been disposed of and that the Japanese subsidiary set up to manage the restaurant is expected to be entirely disposed of in June 2013.
The London subsidiary was sold in January 2012.
Although Jom Makan International is a dormant company, the company continued to pay its directors about RM40,000 a year from 2007 to 2010. MyFranchise said the payments to directors ceased in July 2011.
Meanwhile, MyFranchise had in July 2007 approved the purchase of a RM4.56 million shoplot in Kelana Jaya for the Kitchen Sentral project.
“Kitchen Sentral was to be a one-stop centre for research and development, training, collections, packaging, storage, international distributions and franchise administration centre for the Malaysia Kitchen programme,” the audit notes.
However, the idea was scrapped in July 2009 and the shoplot was left empty, albeit well-maintained, until it was audited in August 2011.
According to MyFranchise, the shoplot was rented out in April 2012 and the Malaysia Kitchen programme as a whole was transferred to the International Trade and Industry Ministry.