Shafie advises Sabah government to set up a new entity rather than take over an ailing company with sukuk money

KOTA KINABALU – Datuk Seri Mohd Shafie Adal, president of the Parti Warisan, said that SMJ Energy Sdn Bhd should have created a new firm instead of taking control over a failing one with its sukuk fund.

Shafie said that Datuk Seri Mahidi Manjun’s explanation, stating that the funds had been used to repay the RM700mil Sabah Development Bank loan to Sabah International Petroleum(SIP), was not a business decision based on rationality.

Why take over a failing company (SIP). It would have been better if a company was started without debts in order to enter the oil and gas industry. Shafie spoke to reporters on Friday, June 14, after the US ambassador to Malaysia Edgard Kagan paid him a visit at his residence.

He said that using the sukuk money to repay SIP’s debt looked more like an emergency bailout than a restructuring for companies linked to state governments.

“Is my question, ‘Why are we using the money (sukuk), raised by the public to fund a restructuring that involves three state owned companies SMJE SIP SD Bank wrong?’?” He said.

Shafie expressed his concern that the state government might incur more debts.

He said that if you use public funds to settle your debts, then you must repay them. SD Bank already had non-performing loans totaling RM3.1bil, from 20 different companies.

Shafie, Shafie the leader of the State Opposition, questioned the deals that SMJE had made.

Masidi responded by accusing him of making unfounded statements.

Masidi stated that the restructuring of state-owned firms and the use sukuk fund would benefit SMJE as well as SD Bank.

Shafie claimed that SMJE (a company owned by the Chief Minister of Sabah Inc.) posted a loss last year of about RM7mil and the government could have used the sukuk money, which totalled about RM900mil to meet the state’s energy and water needs.

Shafie said Masidi must name the companies that have non-performing loan.

He said that lessons must be learned from 1MDB’s fiasco.

It took loans initially from the Employees Provident Fund, but then accumulated debts of RM40bil.

Then, the Prime Minister asked the Cabinet to include 1MDB. He said that the government was now responsible for 1MDB’s debts.

Related Articles