McDonald's ran for months without licences in Delhi, admits top official; blames management feud
US fast food chain McDonald's 43 outlets in the national capital had been operating without valid 'health licences' for nearly three months starting April 1, its estranged India partner Vikram Bakshi has alleged.
Last month, McDonald's had decided to shut down 43 of the total 55 outlets in Delhi due to its failure to renew eating house licences.
Mr Bakshi, an equal joint venture partner of McDonald's India Pvt Ltd (MIPL) in Connaught Plaza Restaurants Ltd (CPRL), the licensee for North and East India regions, said that the licences had expired on March 31. "From April 1 to June 27, 2017, we did not have any health licence, it's absolutely correct," Mr Bakshi told news agency PTI.
Mr Bakshi has been at loggerheads with McDonald's since 2013 when he was removed as the managing director of CPRL and is contesting it at legal forums, including the London Court of Arbitration. Mr Bakshi said that the health licence was necessary from local municipal bodies to run the restaurants for water hygiene and proper maintenance of food, among others.
When contacted to confirm if the company operated those 43 outlets without valid health licences, Barry Sum, Director - Corporate Relations, Asia Foundational Markets, McDonald's, declined to comment. "We want to focus our efforts on resolving the issues as soon as possible at this moment," he said.
The closed outlets are unlikely to open any time soon as Mr Bakshi has refused to sign the licensing documents. To renew it, the JV partner and an MIPL-nominated director have to co-sign licence renewal applications.
Mr Bakshi said: "In early March before the licences were to go for renewal, I have clearly stated that because of issues of food safety and because of us not actually providing quality and safe food to customers, I no longer intend to sign (to apply for renewal of) the licences."
Mr Sum squarely blamed Mr Bakshi for the closing of the McDonald's outlets in Delhi. "The current situation is the result of our former JV partner's refusal to co-sign the licence renewal applications with an MIPL-nominated director, which were the protocols previously approved by the CPRL board," he said.
The restaurants will reopen when the required licences have been obtained, Mr Sum said.
MIPL still intends to look for a constructive resolution to the situation so that the impact on stakeholders will be mitigated. This will require the appointment of someone from CPRL other than the directors, he added.
Mr Bakshi defended his decision, saying once he was removed from the post of managing director in 2013, he no longer had the authority.
Even under a new structure when he co-signed with MIPL nominated director Ayesel Melbye, Mr Bakshi claimed that it was him who had to face the issue on the ground and only he was called whenever there was a 'challan' (penalty) or a police case as his name was in the licence. "Ayesel Melbye doesn't live here and continues to live outside India and she is beyond the laws of India," he said.
Alleging deterioration in quality of food served, Mr Bakshi said: "I have been constantly writing to McDonald's board and the CEO of the company since 2014 about various issues right up to having served a fried lizard in Kolkata."