MALAYSIA: Malaysia's KFC head says won't quit
The head of fast-food chain KFC Holdings (Malaysia) Bhd said on Tuesday he would not quit after being suspended when an independent auditor's report revealed shortcomings at the firm, the Reuters news agency reported.
KFC, which has the KFC and Pizza Hut franchises in Malaysia and Singapore and the KFC franchise in Brunei, suspended Johari Abdul Ghani on Monday and gave him 21 days to reply in writing to issues raised in a report by PricewaterhouseCoopers.
KFC, which generates 1.4 bn ringgit ($369m) in business a year, said issues raised by the PwC report included the high salaries of Johari and another director, who was also suspended, and a lack of transparency on the handling of several major deals.
Parent QSR Brands Bhd said on Monday the PwC report provided a glimpse of what it called the directors' "excesses" -- including costs of nearly 5m ringgit a year, plus six luxury cars.
Johari said he would fight the suspension order, rare in corporate Malaysia. "I'm still working because I've yet to receive a letter. They cannot announce the suspension through a press release, there must be an official document given to me," he told Reuters. "The report is factually wrong, and it looks as if I'm not performing my duty as managing director."
KFC's new board had asked PwC to review the firm's financial position, operational procedures and contractual obligations.
"We are all perturbed at the extent of the shortcomings revealed in the report," KFC's new chairman Nik Ibrahim Kamil said in a statement issued late on Monday.
KFC and Pizza Hut are owned by Yum Brands Inc. of the United States. Johari said his removal could lead to a review of the franchises. "The franchise agreement states very clearly that any removal of the managing director would trigger ... default of the franchise. Yum has the right to do anything," he said.
Some investors have shunned KFC on worries the boardroom tussle might hurt profitability. "We used to own shares ... but because of shareholder risks, and as a result of that, operational risks, we decided to exit for the time being, said Geoffrey Ng, who manages $435 million in stocks and bonds as chief investment officer at Malaysia's Pacific Mutual Fund Bhd.
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