By Sujin Thomas

MALAYSIAN police are investigating a restaurant franchise chain after 10 investors, including a Singaporean, lodged a report claiming one of its directors had absconded with more than RM9 million (S$3.7 million).

The investors are part of a group of more than 3,000 people, mostly Malaysians, who bought shares in the franchise known as Island Red Cafe. About 200 Singaporeans are said to have invested in the company, which claimed a monthly turnover of about RM2 million.

Each lot of shares was sold for about RM6,000.

The first Island Red Cafe opened in Kuala Lumpur in 2007. The cafe is known for its range of local and Western food and has 15 outlets throughout Malaysia.

The 10 investors lodged their police report at the Nusa Bestari police station in Johor Baru on Sunday.

The Malaysian Chinese Association Youth's consumer affairs bureau, which promotes and enforces consumer rights, is working with the police to deal with complaints.

The Singaporean who lodged the report, Mr Ng Ee Siong, 50, said he was lured into investing in the business by its concept.

Mr Ng, who works in a multi-level marketing business in Singapore, said that in return for a lot of shares that he bought some time last year, he was given a voucher worth RM100 to spend at any Island Red Cafe and RM300 in cash on a monthly basis.

He said: 'I could easily have made back my principal sum in two years that way and earned a profit too.'

He said he bought a second lot of shares late last year and also introduced five Singaporean friends as investors.

But Mr Ng claimed that he stopped receiving the vouchers and cash payouts earlier this year, adding that he had not been able to contact any of the company's four directors - including the one who is said to have absconded.

Attempts by The Straits Times to contact some of these directors yesterday were not successful.

This article was first published in The Straits Times.