KOTA KINABALU: The State Government may use whatever terms it wishes to explain its decision to convert the RM200 million government fixed deposit into Redeemable Preference Shares (RPS) in the Sabah Development Bank (SDB), but the substance remains unchanged, says Opposition Leader and Warisan Sabah Party President, Datuk Seri Mohd Shafie Apdal.
He emphasized that the funds in question belong to the people.
As a fixed deposit, this amount was a government asset that could have been directed toward various development initiatives.
Now, he noted, the government has opted to inject the sum as capital to bolster SDB’s financial position.
Yet, he questioned the necessity of such a move given that the state already fully owns the bank.
SDB was originally set up to support Sabah’s development by financing key economic projects, Shafie explained.
But in practice, he said, it now operates more like a commercial bank.
“If that’s the case, why must public funds again be used to reinforce it?” he asked in a statement issued today.
More troubling, he added, is that this is not the first instance of public money being deployed to resolve problems within state-linked companies.
He pointed to the October 2023 restructuring of Sabah International Petroleum (SIP), when the public was expected to accept a financial arrangement involving RM900 million in Sukuk issued by SMJ Energy to settle SIP’s RM1.269 billion debt to SDB.
Now, another RM200 million of public funds is being channelled to strengthen SDB’s capital base.
Shafie raised concerns over the recurring need for government financial intervention in state-owned enterprises:
“Why do issues involving GLCs keep requiring taxpayer support? Why does this pattern persist?”
He urged the government to provide clear answers on why such situations continue to emerge.
Meanwhile, the Sabah government refutes Shafie’s claim that the conversion of the state’s existing fixed deposit of RM200 million at Sabah Development Bank Berhad (SDBank) into Redeemable Preference Shares (RPS) constitutes a ‘bailout’.
The Assistant Minister of Finance II, Datuk Mohd Ishak Ayub, clarified that the government did not inject new funds into SDBank, as the amount of RM200 million had already been deposited in the bank.
