PKR today alleged the Asian Institute of Medicine, Science and Technology (AIMST) outsourced its lucrative in-house cafeteria services to a company owned by Penang MIC Youth chief J Dhinagaran despite the institution’s ability to manage the business.

NONE At a press conference today, PKR national strategy and policy bureau secretary S Gobikrishnan produced an appointment letter to prove that the cafeteria business worth RM10 million was outsourced to Jaya Cafe Holdings Sdn Bhd without open tender on Jan 5, 2007.

"What was the basis for letting go such a lucrative in-house contract and outsourcing it to the MIC-linked company without open tender?" Gobikrishnan asked.

He said his search with the Companies Commission (SSM) on Jaya Cafe Holdings Sdn Bhd listed Dhinagaran, who is also national MIC Youth treasurer, his brother and two others as its directors who were appointed Jan 3, 2007, exactly two days before the AIMST cafeteria contract was awarded to them.

Profitable

Until Dec 31, 2006, AIMST carried out the business of food catering on its own, with a revenue of RM3,267,103 in 2006.

After the contract was awarded, Jaya Cafe Holdings Sdn Bhd recorded a total revenue of RM20,452,720 from 2007 until 2009, an amount that could have gone to the university coffers, Gobikrishnan said.

He said according to an external audit report commissioned by the MIC in 2010, the rationale of outsourcing the business to the MIC-linked company had been questioned.

"We can't understand why the profitable operation of AIMST was abruptly ceased in January 2007 and outsourced to Jaya Cafe," says an excerpt from the audit report that was shown to the media.

However, Gobikrishnan declined to reveal the identity of the auditor.

Gobikrishnan also claimed that AIMST had forgone rental income of RM867,609 because Jaya Cafe was paying for a much smaller area than it occupied.

"Jaya Cafe Holdings was only allowed to rent an area of 1,224 square feet, but it was found to be occupying 8,652 square feet of area and paying rent for the smaller area," Gobikrishnan said.

"It should pay RM1,019,079 in rent but the rental collected was RM151,470 for 2007, 2008 and 2009," he said.

No action after audit

Gobikrishnan also alleged that Jaya Cafe Holdings had over-claimed a total of RM498,185 for cafeteria services for the years 2007 and 2008.

According to him, the students were fully subsidised for food but Jaya Cafe overestimated the number of students when making its claims from the university.

As proof, Gobikrishnan furnished a letter dated May 18, 2009, from a chartered accountant to MIC’s education arm, Maju Institute of Educational Development (MIED), that states Jaya Cafe had overclaimed RM121,558 between April and December 2007 for food and RM95,775 for supplying food for AIMST's official launch.

This is on top of another RM273,760 over-claimed for food between January and December 2008.

This information, Gobikrishnan said, was based on an audit done on AIMST following the controversy surrounding the university and its management MIED that broke out in 2009.

"But after the audit, it went quiet. No action was taken," he said.

Gobikrishnan warned that this was just the beginning and more would be exposed if MIC failed to address this matter.