AUDIT REPORT A whopping RM46 million in loans given by Perbadanan Nasional Bhd (PNS) to those in the franchise business have not been paid back for more than six months.

This represents 41 percent of of the RM111.4 million disbursed by the agency under the Domestic Trade, Cooperatives and Consumerism Ministry.

The Auditor-General's Report for 2014 reveals that 231 borrowers have been unable to finance their loans with PNS from 2012, up till November 2014.

The report said this exposed PNS to the risk of failing in its task to develop franchise entrepreneurs.

It also blamed the corporation for issuing risky loans in the first place.

'Criteria for financing not clear'

"The criteria for financing is not clear and the mechanism to monitor the performance of borrowers is not yet fully implemented.

“The outcome is greater risk of more non-performing loans," the report says.

Besides risky and non-performing loans, the auditor-general is also not satisfied with the investments of PNS  in two of its subsidiaries.

The investments were valued at RM29.66 million, but they cost PNS more than double the figure - at RM61.33 million.

"For three years, there were no dividends recorded from investments in (PNS) subsidiaries," the report says.

The Domestic Trade Ministry is one of 18 ministries and agencies being called up by the PAC over findings in the latest instalment of the Auditor-General's Report that was tabled in Parliament yesterday.