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Sabah has to learn not to be 'suckers' to private companies from peninsula, says Masidi

Publish date: Wed, 29 Nov 2023, 08:41 PM

KOTA KINABALU: Sabah will ensure it can recover as much as possible of the money borrowed from the state, says Datuk Seri Masidi Manjun (pic).

He added that this includes private companies in Peninsular Malaysia and said that there would be no write-offs for loans by these companies, adding the Sabah government would doggedly go after what was owed to it.

The Sabah Finance Minister then said the present government had inherited a large debt due to money being loaned by state-owned Sabah Development Bank (SDB) to government-linked companies (GLCs) and private companies, including those from the peninsula,.

He added this should serve a lesson to the government when considering giving out loans in future.

"Sometimes I don’t understand (why) we entertain companies that are not eligible to secure loans in the peninsula and we become 'suckers' in Sabah," he said during the question time at the Sabah state assembly here on Wednesday (Nov 29).

"We should learn from this, these peninsula companies which could not get loans from banks there run over to Sabah (to secure loans)," Masidi added.

He was responding to a question by Datuk Seri Mohd Shafie Apdal (Parti Warisan-Senallang) who had asked how much Sabah GLCs owed to SDB and what were the actions by the state government to recover these sums.

Replying to Masidi’s answer, Shafie said the large debts were not caused by the previous state administration helmed by Parti Warisan but inherited by the previous Barisan Nasional government.

Masidi said he was not pointing the finger at the then Warisan government but merely stating it was a legacy problem.

“It (debt) was there before you and we came in, that is the point I’m trying to make but the problem must be solved. The difference is however, I decided to be unpopular by taking the bull by its horn and try to solve it,” said Masidi.

He added that he knows it is a big problem, saying that 60% of the loan portfolio was given to companies from the peninsula.

"There will be no whitewashing (of the debts) to borrowers comprising private companies particularly from the peninsula; if we have to be 'ah long', then being ah long it is," Masidi said, adding the state had a new team tasked to recover the debts.

As for Sabah GLCs owing money to the state, the Finance Minister said they owed RM2.2bil, including RM1.2bil by Sabah International Petroleum (SIP), as of the third quarter of this year.

He added after state-owned oil and gas company SMJ Energy Sdn Bhd took over SIP, some RM700mil had been settled in the first phase of the debt repayment.

Different from loans given to private companies, Masidi said, the state is able to write-off debts by state GLCs due to "Nominated Loan" agreement between the state government and SDB in 2010.

He added these GLCs were unable to repay the loans and eventually were not not operational any more.

"Hence, the failures by these GLCs to repay the debts means the state government has to cover the losses.

"This write-off is a non-performing loan (NPL) recovery method to improve SDB’s credibility as a state financial institution," Masidi said.

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