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OldTown White Coffee China franchiser under probe for suspected contract fraud

KUALA LUMPUR (Dec 17): OldTown Bhd's indirect wholly-owned unit Shenzhen Kopitiam Asia Pacific Ltd (SZKAP) is currently under criminal investigation by the Chinese Public Security Bureau for suspected contract fraud.

In a statement today, Jiangsu G&L Food & Beverage Management Co Ltd (G&L) chief operating officer Tao Yu Chen said the company was reported by Ai Chang Investment Ltd in April 2018 for the issue of trademark infringement.

G&L had been granted the right to operate OldTown White Coffee within Jiangsu province, to use the trademark "OldTown" and to develop it into franchising business by SZKAP in May 2016.

Tao said Ai Chang reported to the local Administration for Industry and Commerce that they are the actual trademark owner in mainland China.

"In view of that, we have been forced to close all of our OldTown White Coffee outlets and this has caused tremendous damage to our company," she said.

G&L said franchising rights were also given to Xiamen Kuaike Investment Management Co Ltd, another Chinese company in FuJian in March 2017.

It said that to-date, all OldTown White Coffee outlets in mainland China have been shut down.

Shares in homegrown coffeemaker OldTown Bhd, which also operates its own brand of coffee shops, were delisted from Bursa Malaysia on April 4 last year after less than seven years on the stock exchange.

Jacobs Douwe Egberts, a Dutch coffee company, successfully gained control of OldTown via its indirect unit Jacobs Douwe Egberts Holdings Asia NL BV.

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