Already under scrutiny for its trail of ill-fated “investments” in tourism-related businesses, the losses at what has been termed as the “jewel in the crown” must come as a severe blow to its depleted resources. A year ago, Pempena retrenched 20 staff saying it could not continue to pay their salaries.
Records filed with the Companies House (equivalent to the Companies Corporation of Malaysia) show that the restaurant had been incurring losses since it opened in 2005.
Pempena holds 540,0000 shares of £1 (RM4.9) each while London-based Coco Restaurants (UK) Ltd has 239,998 shares and Malaysian businessman Low Chin Meng 420,000 shares.
This means Pempena’s share capital has almost been wiped out with big amounts listed as owing to third parties. As of Aug 31 last year, it had accumulated losses of £998,131 (RM4.89 million) and there is also a charge to the Westminster Bank which was created in 2005. It is not immediately known if amounts owed to the bank have been settled, but documents have listed as £432,979 (RM2.1 million) under “creditor – amounts falling due within one year.”
Under British law, companies with turnover of less than £5 million (RM24.5 million) are not required to publish such details. (The 2010 accounts are not due until later next year.)
The restaurant is managed by a London-based Malaysian accountant, Eddie Lim, who also owns and runs another up-market restaurant, The Mango Tree, and is also listed as the director of The Hibiscus.
Lim, whose wife Joyce is also the company secretary, denied any conflict of interest having interests in two competing eateries.
In an e-mail response to queries by theSun, he said: “As the owner of Mango Tree, I do not see any conflict of interest in my ownership of Awana. I am not the only restaurateur with interest in more than one restaurant be it in London or elsewhere.”
Lim said Pempena was always aware of his involvement with a rival restaurant and it had no objections to his wife being appointed company secretary. “I was approached to establish Awana due to my success operating Mango Tree which has been in operation much longer than Awana,” he said.
What about the losses? Lim blames it on the economic factors. Business, he said, experienced cycles of growth and troughs. “The UK has been in recession over the past two years arising from the direct impact from the global credit crunch. Whilst Awana has been adversely affected by the effects of the recession, it hasn’t closed down yet,” he said.
Lim said that although the restaurant was in the red, the losses were gradually decreasing with each year in line with expectations from new restaurant set-up in the UK which should break even into the fourth and fifth year.
While losses may be decreasing, the figures are surely cause for alarm. Losses during the first year of operations were £633,000 (RM3.1 million) and two years later, it hit £998,000 (RM4.8 million). The accounts for the financial year ending Aug 31 have to be filed.
The records also list Kuala Lumpur-based lawyer Philip Chan and former minister Datuk Azalina Othman’s ex-special officer, David Chiam, as directors. Companies House record lists Chiam’s nationality as “British” although he is a Malaysian. Chan and Chiam have told theSun that they resigned from the board in March last year after Azalina was dropped from the cabinet.
They replaced Tourism Malaysia director Datuk Mohamad Thaiyab Mirza and Akil Selbi as directors when Azalina was the tourism minister. On the discrepancies, Lim said Chiam and Chan submitted their resignation on March 31, 2009 and Feb 10, 2009, respectively.
“We have not acted on these submissions as Pempena has not reverted with the paperwork for their replacements. As for the information pertaining to Chiam, I can only conclude this to be an oversight by the company’s registrar when updating David’s directorship in the first instance,” Lim said.
Since the inception, he said, the company had not paid for its directors to travel to the UK to attend meetings. Chan had previously served in the National Sports Advisory Council under Azalina’s tenure as sports minister when the ill-conceived Brickendonbury project was mooted. He later served on the board of the Malaysian Tourism Council when Azalina switched portfolios after the March 2008 election.
Chiam’s appointment was under question because the minister had allegedly used other subsidiaries to pay his salary. Azalina also appointed him as executive director of other Pempena companies, including D Corp, Malaysia My Destination (MYD) Sdn Bhd, Malaysian Travel Business and Awana Beijing. -- theSun
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