From: The Jakarta GlobeBambang Rachmadi has fired back at fast-food giant McDonaldâ€™s, saying the US-based corporation created â€śartificialâ€ť losses at their domestic joint venture while â€śsuckingâ€ť huge earnings out.
By Muhamad Al Azhari
By Muhamad Al Azhari
â€śWhen [the joint venture] was operating in Indonesia from 1991 to 2008, McDonaldâ€™s sucked as much as $190 million [from it], mostly from royalties, franchise fees and interest on loans,â€ť but he never received any profits from the venture, Bambang said in a statement last week.
He also claimed McDonaldâ€™s dual roles as franchisor and franchisee, as well as lender and borrower, were conflicts of interest.
â€śCurrently, Bambang Rachmadi is processing a lawsuit against McDonaldâ€™s in South Jakarta District Court because McDonaldâ€™s is considered to have violated laws and have done serious manipulations that caused [him] as a local partner to suffer serious losses,â€ť the statement said.
Bambang and McDonaldâ€™s formed PT Bina Nusa Rama in 1991. At one time it operated 97 McDonaldâ€™s outlets across the nation, and had accumulated debts of $150 million as of 2007.
In June, McDonaldâ€™s sold the assets in the 97 outlets owned by the venture and transferred its franchise rights to the Sosrodjojo family. All that remained of Bina Nusa Rama was debt.
Bambangâ€™s legal counsel, Tri Adhyaksa, claimed in June that McDonaldâ€™s sold the assets and franchise rights for only $20 million.
After the sale, the company was left to pay $130 million in debt, which would render Bambangâ€™s shares almost worthless.
However, McDonaldâ€™s said in a statement last week that it would honor an arrangement to determine the â€śfair market valueâ€ť of Bambangâ€™s 10 percent stake in Bina Nusa Rama, noting that â€śgiven the legal relationship between the parties, neither shareholder is personally responsible for any of the debts.â€ť
Tri Adhyaksa said Bambang was seeking $105.5 million in compensation for losses.
Bambang was left with 13 independently owned McDonaldâ€™s outlets after the corporate parentâ€™s sale of Bina Nusa Ramaâ€™s assets. McDonaldâ€™s this month demanded that he shut all his former McDonaldâ€™s outlets, which are now operating under the name ToniJackâ€™s, claiming he had violated a contractual agreement restraining him from competing with McDonaldâ€™s outlets.
However, ToniJackâ€™s senior management claimed on the same day that Bambang no longer had a stake in the outlets.