Economist: Tealive saga unlikely to affect investor confidence

Economist Barjoyai Bardai says Tealive employees will be the hardest hit by the court ruling for Loob Holding to cease operations.

PETALING JAYA: An economist says it is “sad” that Loob Holding Sdn Bhd will have to abide by a court ruling to stop operations as this will likely have a huge impact on the staff of Tealive, which the company operates.

Speaking to FMT, Universiti Tun Abdul Razak’s Barjoyai Bardai said although the authorities’ failure to uphold court decisions usually affected investor confidence, this might not be the case in this particular situation.

“I believe investors will understand Tealive’s defiance. Personally, I feel an interim stay should have been granted, especially if you think of the impact of the decision.”

He said this wouldn’t necessarily indicate a bias towards the Malaysian company or that the courts were unfair. Rather, he said, it would show that it was taking into account the welfare of the workers and the fact that La Kaffa International Ltd, the owner of Chatime – a popular bubble milk tea brand from Taiwan – could still seek compensation in the form of profits if it wins the arbitration proceedings in Singapore.

“Those following the case, particularly investors, will surely understand that the case will have the biggest impact not on Loob, but the 1,171 Tealive employees.

“To me, the impact on the workers carries more weight than who is right or wrong.”

He added that even if an interim stay was granted on the injunction sought by La Kaffa International Ltd, there were avenues for the Taiwanese company to seek compensation from Loob.

It was previously reported that several Tealive outlets remained open for business despite Loob failing to get a stay against a court decision prohibiting it from operating a business similar to Chatime, the franchise under which Tealive outlets had earlier operated.

Checks by FMT found that Tealive outlets were doing brisk business.

The Tealive brand was created by Loob Holding after it exited a franchise agreement with La Kaffa last year.

Loob was formerly a Chatime franchise holder in Malaysia.