Wednesday September 3, 2003
Ting tells why he’s quitting KFCHBY B.K SIDHU
Datuk George Ting, KFC Holdings (M) Bhd (KFCH)'s executive director and president of its fast-food division, said the KFCH board and Kentucky Fried Chicken franchisor Tricon/Yum! International Brands were fully aware of his interest in Shakey's Pizza and he did not at any time deceive the Malaysian public about his family-held business.
Ting owns more than 70% of Shakey's through companies such as Synergy Sdn Bhd and Prominent Eight Sdn Bhd.
“When I was approached in 1999, I was not looking for employment but a business opportunity. The opportunity of owning a meaningful stake in the fast-food operations was something that was promised and that is why I returned to KFC in 1999,'' Ting told StarBiz.
“According to the arrangement before the completion of the deal, I only need to spend half a day at KFC and the other half on my family business,” he said.
Ting, who will leave KFCH on Sept 15 after turning down an offer to remain on the board, said he did not mind moving on as the 20% to 30% stake in Pizza Hut promised to him had not been fulfilled and the stake in the management buyout (MBO) scheme was “not meaningful enough” for him to stay on.
Ting is a veteran in the fast-food industry. He began his career at KFC 20 years ago. He left KFC in 1997 to pursue his own business i.e. Shakey's.
In the early years, Shakey's was part of the KFC (Malaysia) Bhd group. At that time, Tricon/Yum! did not allow KFC to grow the Shakey's business for it was a competitor of Pizza Hut.
At the point of exit in 1997, Ting and then KFC chairman, Datuk Mohd Sarit Yusoh, took the offer to buy Shakey's from KFCH. Ting's family controlled 60% of Shakey's and Sarit the balance 40%. Over the years, Shakey's has grown from 10 to about 30 outlets now but it has remained mainly in the Klang Valley.
In 1999, the controlling directors of KFCH approached Ting to return to the company as president of the fast-food business. These directors and Yum! International were fully aware of his involvement with Shakey's.
“The general understanding then was that there would be a corporate restructuring, whereby I would land up with a meaningful stake in the fast-food division, and I would undertake to divest my stake in Shakey's after the restructuring. All parties had agreed to the arrangement,” Ting said.
“But after four years and for various reasons, that promise could not be fulfilled. As such I did not divest Shakey's,” he added.
Under the MBO scheme, Ting was to be given a small stake in the new company, QSR Bhd, along with seven others. The precondition for the approval of the scheme, however, was that he had to sell his stake in Shakey's by Sept 15, 2003. According to Ting, the stake given to him in the new company is small and, as such, not meaningful enough for his involvement.
Interestingly, Tricon/Yum! International has been very understanding to Ting about his family's involvement in Shakey's. Tricon/Yum! International had agreed to allow Ting to hold on to Shakey's business up to six months after the completion of the MBO exercise.
Despite the controversy over his position, Ting said KFC and Pizza Hut “are great brands that will continue to do well here”.
When asked about his next move, Ting said he wished to take a break to relax for a while. According to him, Shakey's had been run independently in the past four years and that the same team can continue doing so.
Stock Watch On KFC Stock Watch On KFC-WA