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Wednesday July 13, 2005

KFCH executive director rebuts Johari’s claims

10 Clicks To Victory Contest 

KFCH executive director Ahmad Aznan Nawawi explains and rebuts some of the allegations made by suspended group MD Johari Abdul Ghani, who is also group MD of QSR Brands Bhd. 

StarBiz: Johari said he had not received the letter to suspend him and the show cause letter

Aznan: There will be a formal communication of the board’s decision to him. But the board did deliberate in his presence and explained to him why he is being suspended and the letter is just a formality. With that, he is prohibited from coming to the office with immediate effect.  


StarBiz: Johari questioned the appointment of Brand Mercatus Malaysia as public relations agent of KFCH when there is an internal PR department that could well handle the job. Your comments

Ahmad Aznam Nawawi
Aznan: The appointment of Brand Mercatus was by the executive committee (exco) at one of the exco meetings. 


StarBiz: Johari claims that the choice of words in the July 11 press release was tantamount to “a personal attack” on him and his credibility.  

Aznan: The press release contained purely facts. It is short of producing the PwC report, but we cannot reproduce the report since it is a private document and we have given our undertaking to PwC on that. The issue of character assassination does not arise in this context. 


StarBiz: What would the board’s next course of action be as far as Johari is concerned? 

Aznan: The board will wait for his reply. 


StarBiz: As and when Johari submits his reply, would it lead to his removal? 

Aznan: We are not pre-empting anything. We have to wait for his reply and move from there. The question of removal or termination does not arise at this point of time. 


StarBiz: Would the board be considering a severance contract for Johari as he claims the board wants him out? 

Aznan: It is not even an issue the board is considering. For all we know, he may come back with a good explanation and given the scenario, we do not want to pre-empt anything now. 


StarBiz: Johari claims the PwC report did not include recommendations, conclusion or any allegations that should lead the board to suspend him. Your comments, please? 

Aznan: It is true the report does not make any recommendations; it is only a factual report of the findings. It is left to the board to deliberate and make a decision. 


StarBiz: Why did the board suspend him if the report did not recommend such an action? 

Aznan: The board found enough prima facie evidence that requires him to explain some of the shortcomings. 


StarBiz: Are you jumping the gun to suspend Johari based on a statement of facts before PwC can conduct a forensic audit ? 

Aznan: No, we are not.  


StarBiz: How long after the 21-day grace period would Johari remain suspended while the board deliberates on his reply and has a date been fixed for the next board meeting? 

Aznan: No date has been fixed for the next board meeting, and the board is waiting for his reply. He is suspended with full benefits. 


StarBiz: Johari feels the reason for him being sidelined and powers clipped with subsequent suspension was due to his objections over a proposal for a private placement of KFCH shares, your views please? 

Aznan: It is untrue. 


StarBiz: Johari claims that Ernst & Young did not find any irregularities in the 2004 review, so how did PwC come up with the shortcomings? 

Aznan: We commissioned PwC and they came up with their findings. 


StarBiz: To Johari, there is no room in the constitution for the formation of an exco, what is your comment? 

Aznan: There is a provision in the Articles of Association for the formation of an exco of directors. In this case, the exco assists the executive directors in discharging their duties. 


StarBiz: Johari's suspension, which could be an indication of his potential removal, is viewed as a breach of the franchise agreement in which he was appointed managing director and shareholders’ representative, your comments please? 

Aznan: There is no issue of removal of the MD at all. 


StarBiz: Since Johari has highlighted that many of the problems were inherited, will PwC be asked to do a business review of the three years preceding Johari’s appointment as MD? If no, why? 

Aznan: No, we would like to resolve the issue at hand, that is, the shortcomings as stated in the PwC report.  


StarBiz: Is it possible for Johari to receive a fair review of his explanation to the allegations raised by the board within the next 20 days, after the board had suspended him, based on prima facie evidence? 

Aznan: Definitely, he would receive a fair consideration of his reply. That is not an issue at all. 


StarBiz: Will the board call for an EGM to remove Johari if his explanation is unsatisfactory and before PwC can finish its forensic audit on the company? Is this fair, considering that the forensic audit may exonerate Johari and back his claims? 

Aznan: We would like to cross the bridge when we get there. 

KFCH executive director Ahmad Aznan Nawawi explains and rebuts some of the allegations made by suspended group MD Johari Abdul Ghani, who is also group MD of QSR Brands Bhd. 

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