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Sabah minister says state govt should stop being 'suckers' and giving loans to financially-incapable companies

Publish date: Wed, 29 Nov 2023, 05:45 PM

KOTA KINABALU: Sabah should stop giving loans to financially-incapable companies, particularly those from Peninsular Malaysia, said state Finance Minister Datuk Seri Masidi Manjun.

"This is our problem, it is a lesson for us. Sometimes the peninsular-based companies are not capable of getting loans from banks in the peninsula.

"But, we entertain these companies and we became suckers," he said during the state legislative assembly sitting here.

He was replying to supplementary questions from Datuk Seri Mohd Shafie Apdal (Warisan-Senallang) on the state's justification in giving loans to a company which made property investments in Johor.

Earlier, Shafie had also asked about the debt by government-linked company Sabah International Petroleum (SIP) to Sabah Development Bank (SDB) and why the government had to bear and write-off those debts.

Masidi said debts from peninsula-based companies were all inherited from the governments prior to administrations under Parti Warisan and Gabungan Rakyat Sabah (GRS).

"I know this is a big problem with 60 per cent of loan profiles given to peninsula-based companies.

"It was there before you (Warisan in 2018-2020) or we (GRS 2020- present) came in. But I decided to take the unpopular move and take the bull by the horn to solve it.

"I (as state finance minister) inherited it, but I didn't run, that's why we restructured the whole (Sabah Development) bank. Trust me, we have a new team capable of taking stricter action against those taking loans (and defaulting them)."

Masidi, who assumed the portfolio in Jan this year, also gave his assurances that RM2.2 billion owed to SDB would be recovered.

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