No subsidy to Mydin for KR1M, says minister

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PETALING JAYA: The Domestic Trade, Cooperatives and Consumerism Minister Hamzah Zainudin has denied that the government had ever subsidised the operations of the Kedai Rakyat 1Malaysia (KR1M).

His written reply on the issue in the Dewan Rakyat yesterday however, was in direct conflict to comments made by Deputy Prime Minister Ahmad Zahid Hamidi, who on Saturday, was reported as saying the government had made specific allocations for the company that was operating KR1M across the country to sell at below-market prices.

Replying to a question from Oscar Ling Chai Yew (DAP-Sibu), Hamzah said the government had never provided any form of subsidy to wholesaler Mydin Mohamed Holdings Berhad, which operates KR1M.

Instead, the minister revealed that KR1M’s operational cost was borne by a subsidiary company of Mydin.

“The KR1M programme is managed fully by only one company, that is MRT Retail Sdn Bhd, which is the subsidiary of Mydin Mohamed Holdings Berhad.

“MRT Retail is fully responsible for all the operation costs to run KR1M nationwide. The government never gave any subsidy to them,” Hamzah told the Dewan Rakyat.

Ling had asked the ministry to update the House on the number of KR1M outlets currently operating nationwide and the allocation to support them.

In response, Hamzah said RM106.37 million had been spent to date, but that was purely for the purpose of setting up KR1M nationwide, comprising 130 outlets in Peninsular Malaysia, 21 in Sabah and 33 in Sarawak, and one in Labuan.

The DAP lawmaker had also questioned the ministry on the existence of other suppliers apart from Mydin, for goods sold in the KR1M outlets.

On Saturday, Zahid had recommended that the domestic trade, cooperatives and consumerism ministry terminate the contract of the operator, saying they were found to be selling goods higher than the market price.

“They were given a chance. I don’t want to name the company. I myself went to KR1M because I gave them the opportunity to open an outlet with low rental under the Bagan Datuk Umno division (office),” said Zahid, who is the Bagan Datuk MP.

“I allowed the shop to be set up to help the people in my constituency. But it became clear that the prices were more expensive even though the government had specific allocations for the company to sell at below-market prices,” he said when officiating the Kuala Langat Umno division meeting.

On Sunday, Mydin managing director Ameer Ali Mydin denied the accusations, but said commenting on the government’s allegations would serve no real purpose.

“Much has been said on the failure of the operations of KR1M. I shall not comment on any allegations made by the government as it will get us nowhere.

“I would only like to say that this has been a massive loss-making CSR (corporate social responsibility) project for Mydin and we have done this for the benefit of the Malaysian rakyat.

“Our conscience is clear. Those who know me would know what Mydin had to endure in running this CSR project,” Ameer said.

KR1M was a massive loss for Mydin, says its boss

Zahid orders contract of 1Malaysia stores operator terminated

http://www.freemalaysiatoday.com/category/nation/2012/10/08/mp-accuses-govt-of-enriching-crony-mydin/