Karyaneka outlets selling local crafts, clothes sunk by poor sales, audit report finds

The Auditor-General’s report said poor sales of handicraft items and 1Malaysia clothing products caused many Karyaneka outlets to suffer losses. — Bernama file pic
The Auditor-General’s report said poor sales of handicraft items and 1Malaysia clothing products caused many Karyaneka outlets to suffer losses. — Bernama file pic

KUALA LUMPUR, July 31 — Poor sales of local handicraft items and 1Malaysia clothing products caused many Syarikat Pemasaran Karyaneka Sdn Bhd outlets to suffer losses, according to the latest Auditor-General’s report.

The report, the first for the year 2016, stated that only six Karyaneka outlets were profitable from 2014 to 2015. Eleven others suffered losses while eight more closed down in 2015.

“Slow moving and unsold products of each outlet were high amounting to RM338,144 of which 1Malaysia clothing products recorded the highest amount of RM125,807 (in losses),” said the report.

Karyaneka is a brand of Syarikat Pemasaran Karyaneka Sdn Bhd, a Malaysian registered company wholly owned by Perbadanan Kraftangan Malaysia or the Malaysian Handicraft Corporation (Kraftangan), an agency under the Tourism and Culture Ministry

The audit report said that Karyaneka was established to promote Malaysian craft products to local and international markets through a “professional and systematic marketing system”.

It also said that that the management of the company’s central and administrative store was unsatisfactory, and that items were not stored properly and ended up being placed at the “staff working area and passage leading to the emergency door.”

The report stated that closed-circuit cameras were not installed in outlets at the KLIA, Straits Quay, Penang, Langkawi Craft Complex, Kota Baru and Langkawi international airports.

“Appointment of the chairman and the composition of board of directors were not in line with the best practices set out in the Green Book as it consists of top management from KRAFTANGAN and there were no independent directors,” the audit report said.

In its recommendations, it said that Karyaneka should review its current business plan and also appoint independent directors from the private/corporate sector as board members.

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