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Fallen Arches or Just Clowning Around?

Bali Government Claims Several McDonald's Locations Operating Illegally.

(12/22/2003) Against the backdrop of the multi national Prepcom IV meetings being held in Bali to urge good international corporate citizenship, the McDonald's Family Restaurant chain received some unwelcome publicity when the Denpasar City Government announced that several of that Company's outlets in Bali were lacking the necessary operating licenses.

When visited by a 10-member municipal inspection team on Thursday, June 06, 2002, at least three McDonald's outlets in Bali were discovered to be operating without the locally mandatory permits. The official site visits were prompted by repeated summons issued to the restaurant's management to take the steps necessary to secure the needed permits by the local government that were ignored by McDonald's.

Local managers admitted their failure to answer official summons, claiming permits were a matter handled by the corporate headquarters in Jakarta.

Denpasar government officials have threatened that if the necessary permits are not soon secured, the violating restaurants might be closed under the powers granted them by Provincial Regulation number 25 of 2001.

McDonald's Indonesia Operation Beset with Other Problems

In a separate and unrelated matter, the owner of the McDonald's franchise in Indonesia, Mr. Bambang N. Rachmadi continues to be sought by the police for questioning in connection with the misuse of a Rp. 40 billion (approximately $4.7 million) loan facility received through the state social security fund - P.T. Jamsostek to expand the chain in Indonesia. Absent from Indonesia since late March and reportedly in the United States, Mr. Rachmadi has failed to respond to numerous requests from the National Police for an interview.

Police authorities have recently threatened to seek INTERPOL's assistance in locating the Indonesian businessman and bringing him in for formal questioning.