Restaurant association Presma wants automatic moratorium, rent relief following lockdown extension


PETALING JAYA: Following the extension of the nationwide lockdown, the Malaysian Indian Muslim Restaurant Owners Association (Presma) is calling for an automatic moratorium on loans.

Presma president Datuk Jawahar Ali also called for landlords to grant rent relief for the next three months.

Jawahar said it is estimated that about 4,750 of premises would shut down soon, given that cash flow has dried up.

"Most businesses are experiencing operating expenditure eating into capital and reserves," he said.

At the same time, Jawahar also pointed out that 95% of operators do not own their respective premises, hence the need to pay full rental amidst severe declines in business.

As an example, Jawahar said an operator at TTDI is averaging a rental of RM500 a day and would need to pay RM15,000 per month for rental.

"Another famous vegetarian franchise in Jalan Masjid India - one of Malaysia's most expensive areas to rent - is only garnering sales of RM160/day and need to fork out RM13, 000 a month, even after rent discount," he said in a statement on Sunday (June 13).

At the same time, Jawahar said that Presma, which has 9, 600 active members, would need automatic moratorium for at least three months and any repayments will need to be restructured without affecting credit scores.

Jawahar also said that each Presma member has a liability of RM1mil with any given commercial bank, after taking into account business loans, mortgages and expenditure for vehicles.

"If food operators give up business at this rate, the banks will end up not getting any repayments, and this frailty will cost the banks a whopping RM10bil if 10% of 1, 000 of Presma members failed to repay their loans."

Jawahar also said that banks do not lose money in the medium term by extending the automatic moratorium, as he claimed that top banks had made huge profits in 2020 and in the first quarter of 2021.

He claimed that banks will merely suffer short term accounting losses.

"We will pay the banks back once the pandemic is over and the economy fully reopens," he added.

"We also need the landlords who received moratorium to pass the benefit to tenants like us. The government must provide clear guideline on this."

Jawahar also cited Section 7 of the Prevention and Control of Infectious Diseases Act 1988, which stated that if a tenant is unable to pay rent due to the lockdown, the landlord shall not be able to sue the tenant, provided the tenant can prove negative cashflow.

"This relief was scheduled to be in force from March 18 and has since been extended to June 30, 2021. The government shall also provide guidelines on how this section should be operationalised.

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Presma , Moratorium , Jawahar Ali , Restaurants

   

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