Latest news with #SabahLawSociety
Daily Express
17 hours ago
- Business
- Daily Express
Poor governance of GLCs to blame: Managed by some people of questionable integrity and knowledge
Published on: Tuesday, June 10, 2025 Published on: Tue, Jun 10, 2025 By: David Thien Text Size: Datuk John Lo (right) shared his opinions in a 'Sabah Voices to Action' podcast with former Sabah Law Society President Datuk Roger Chin (left) with Kopi Tiam Council hosts Adi and Haffisz organised by NGO Sabar recently on 'Economic Imperative on Stringent Governance for Sabah's GLCs'. Kota Kinabalu: Many of the 250 GLCs continue to lose millions of ringgit yearly. In Kota Kinabalu alone, most of the failed big projects are GLC joint ventures with non-Sabahan companies. 'What it tells us is that all these GLCs have very, very poor governance and this is the whole issue in Sabah. They are managed by some chairmen and board of directors who are of questionable integrity or knowledge. So things just roll along without good performance.' Advertisement 'If all or even 75 per cent of GLCs are doing well, the State government should have been receiving billions of ringgit in term of returns every year because the assets controlled by the GLCs are in the hundreds of billions of ringgit,' said Datuk John Lo, retired banker and advisor to the State Government in his role in the Sabah Economic Advisory Council (SEAC) as well as the Institute for Development Studies (IDS). 'Even if you take three or four per cent returns, we should be getting at least three, four or five, or six billion.' He shared his opinions in a 'Sabah Voices to Action' podcast with former Sabah Law Society President Datuk Roger Chin with Kopi Tiam Council hosts Adi and Haffisz organised by NGO Sabar recently on 'Economic Imperative on Stringent Governance for Sabah's GLCs'. Lo said these GLCs have failed to deliver decent returns from their assets. 5 per cent is acceptable and 10 per cent is considered good. If only the GLCs can generate 5 per cent or better from their assets, the Sabah Government would have several more billions of dividends each year! He said 5 per cent return on assets shouldn't be an issue as the cost of capital assets like land is practically free. Private sector can generate much better than 5 per cent even though they have to pay for land at market prices and to service interest for loans. Compare this to the RM143m the Sabah Government received from the few performing GLCs, of which RM50m was from SMJ Energy. Lo said Johor's KPJ HealthCare Bhd with 43.38 per cent owned by Johor Corp and listed on Bursa Malaysia with a total share value RM1.96 billion, is an example for Sabah's GLCs to emulate. 'KPJ HealthCare Bhd can deliver more dividend than all Sabah's GLCs Profit with more than RM350 million!' Sabah GLCs are also very fond of signing JVs with non-Sabahan companies for whatever reason. 'We need to cultivate homegrown businessmen rather than making or adding money to some non-Sabahan entities instead of within Sabah,' Lo said. 'My point is this, if the GLCs are successful, we could have listed on Bursa Malaysia – we don't need to raise so much government funds. 'Number two, we don't need to depend on the Government budget much. We can raise a lot of money by the billions by going to the market. Datuk Roger Chin said the traditional type of JV is literally over a piece of land. What happens is that the GLC ends up with 10 shoplots as an example. 'If the GLC had developed the prime piece of land, say in Kota Kinabalu, by itself, it would have gotten a lot more money and assets. 'I understand it takes a lot of money to develop the project. The GLC may not have the funds, but funds could have been raised by other ways. 'I have always found it amazing how they can just settle for 10 shoplots. Looking at all the JVs signed, you will realize that is actually like that.' Lo adding to Roger, said: 'If you have a piece of real estate that is very valuable, why does that GLC need to enter into a JV with somebody? They could have easily monetised this. 'You can actually raise funds because you already got a very valuable asset. Why do we need another company in the real estate business to come in? We have a lot of Sabahan developers who can do it. Now why do we need to enter into a JV with these people from outside?' Roger: 'For me, GLCs have a purpose. They are for industries or sectors that no one wanted to go into. Like a milk factory or a cement plant. 'They should only be in sectors where the private sector is not better than them. So they have to grow to be better than the private sector in these industries.' According to Lo, in Sabah two things have been happening for years. 'GLCs are killing the private sector in many areas. 'Our private sector have already been more or less wiped out. Our private sector has no chance to really develop. Worse is that with change of governments, one of the first victims will be the private sector players. 'Oh, you supported the last government so I kill you. Our political leaders they must stop this. 'We cannot have economic growth on a sustainable basis if you keep killing your own Sabahan entrepreneurs. More so, you kill Sabahan entrepreneurs and bring in outsiders. This is very, very serious. The mindset must change. 'Very simply put, if the GLCs belong to the government, then there is clearly a conflict of interest going on. 'The conflict is that I will support the ones that I own. I will give the ones that I own more of a leg up than it should, and therefore making it unfair for the private sector. That's how it distorts the market,' said Roger. 'It is bad because policies will be tailored to favour the GLCs rather than the whole private industry. That's how it distorts the market and the private sector suffers because of that,' Chin explained. He called for a Procurement Act that will be a game changer to equalise the playing field distorted by government's preference or overzealous enforcement of Bumiputra policies. 'Of course, all GLCs can be turned around! Nothing is impossible. All that is needed is political will and political courage. Hajiji (Chief Minister) has started the ball rolling. There are capable Sabahan officers and professionals who can turn around the GLCs!' 'For the first time in Sabah with Hajiji as CM and Masidi as Finance Minister, we have the political courage. The abuses, losses and misgovernance of GLCs have been swept under the carpet for too long. Hajiji has appointed Masidi to be in charge of all GLCs.' 'Sabah Voices to Action - Shaping Sabah's Future Together' is a citizen-driven, non-partisan initiative running from March to June 2025, dedicated to amplifying Sabahans' voices, fostering meaningful discussions, and shaping policies on education, healthcare, public infrastructure, and good governance. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Daily Express
2 days ago
- Business
- Daily Express
Purpose Sabah GLCs set up defeated
Published on: Monday, June 09, 2025 Published on: Mon, Jun 09, 2025 By: David Thien Text Size: Former Sabah Law Society President Datuk Roger Chin (left) and a retired banker Datuk John Lo. Kota Kinabalu: Sabah's Government-linked companies (GLCs) should be profit-centres earning billions in ringgit for Sabah. As economic force multipliers they should be providing high income jobs to thousands of Sabahans as they embark on down-streaming for export. If successful, they could be listed on Bursa Malaysia to raise development funds. Advertisement That was the ideal situation envisioned by former Chief Minister Tan Sri Harris Salleh when he initiated the set-up of many Sabah GLCs during the Berjaya administration. Subsequent Sabah Governments proliferated many more GLCs, with little consideration of their economic purposes or roles. Mostly to give perks to political warlords and cronies. Good governance was thrown out of the window. The result is some 250 GLCs today, most of which are poorly managed and bleeding millions of ringgit. Advertisement The present State Government's placement of more professionals in the management of GLCs in an attempt to reform and turn around loss-making GLCs is in the right direction, according to retired banker Datuk John Lo. He shared his opinions in a 'Sabah Voices to Action' podcast with former Sabah Law Society President Datuk Roger Chin with Kopi Tiam Council hosts Adi and Haffisz organised by NGO Sabar recently on 'Economic Imperative on Stringent Governance for Sabah's GLCs'. 'I always feel we Sabahans are our biggest enemies because people who have been put in trust are not doing their job,' Lo said Harris used GLCs to propel the boom during the Berjaya government, instead of just using government departments. 'One of the main reasons being GLCs are very private sector driven and should be able to help Sabah develop faster. During his (Harris) time, the GLCs generally speaking did a very good job. 'There was a big boom.' Lo, who is an advisor to the State government in his role in the Sabah Economic Advisory Council (SEAC) and in the Institute of Development Studies (IDS). Lo recalled how Harris started a number of GLCs when he became Chief Minister. Harris' intention was that these GLCs would help to expedite the development of Sabah. To a large extent, Harris succeeded. Sabah became No. 2 state in Malaysia, after Selangor. Since he left office, Sabah has become No.2 from the bottom. Some of the GLCs that Harris created include Sabah Gas, Sabah Energy, Sabah Methanol, Asean Supply Base, Sabah Air, Sabah Forest Industries (SFI), Tanjong Aru Beach Hotel or TABH [now Shangri-La Tanjong Aru Resort], Labuan ShipYard, Sabah Hot Briquetted Iron, KPI, SUDC, Sabah Cement Industries. Significantly, Harris also gave birth to three financial institutions – Sabah Development Bank, Sabah Bank and Sabah Finance. Unique because no other state has ever been granted approval for three financial institutions bearing the name of the state. GLCs dominate every important economic sector in Sabah. GLCs are in effective control of many natural resources: mining/minerals [SMM], timber and FMU [Innoprise, Safoda]. 'The GLCs have been given the most valuable lands in Kota Kinabalu. All the commercial lands were given to the GLCs for a mere RM1,000. 'And then they go and JV (joint venture) with somebody and today a particular GLC is insolvent, instead of making billions. The GLCs are in control of a lot of our assets from oil palm plantations which are worth in the billions, with monopolies like Cement Sabah etc. 'Every aspect of our economic life, we have some GLCs involved,' Lo revealed. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Daily Express
25-05-2025
- Business
- Daily Express
Action being taken on sick GLCs
Published on: Sunday, May 25, 2025 Published on: Sun, May 25, 2025 Text Size: Julita said not all State-linked firms are underperforming, citing several that have delivered dividends, jobs and investment opportunities. Kota Kinabalu: The Sabah Government has rolled out a series of reforms to improve governance and performance of government-linked companies (GLCs) and statutory bodies. Assistant Finance Minister Datuk Julita Majungki said the measures reflect the State's commitment to ensuring accountability and maximising the impact of its corporate entities. The reforms come amid criticism from former Sabah Law Society President Datuk Roger Chin, who alleged political interference in loss-making GLCs. Julita said not all State-linked firms are underperforming, citing several that have delivered dividends, jobs and investment opportunities. As part of ongoing improvements, the State is restructuring major GLCs like Sedco and Qhazanah Sabah Berhad, appointing new leaders to drive recovery and accountability. 'The goal is to optimise resources and focus on ventures that truly benefit Sabah's economy,' she said. Advertisement Sabah currently oversees 27 holding companies and 22 statutory bodies in key sectors like plantations, energy and property development, supported by a network of around 250 subsidiaries. To streamline operations, the Government has introduced stricter policies, including vetting board appointments, reassessing business models and tightening financial monitoring. A major new rule requires all joint venture deals involving State-linked firms to undergo review by the State Attorney-General's Office and the Finance Ministry before Cabinet approval, a move designed to protect public interests. A dedicated GLC Monitoring Committee, co-led by top finance officials, has also been formed to identify governance gaps and recommend corrective actions for underperforming firms. Some inactive GLCs are being restructured or shut down to cut losses. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
The Star
22-05-2025
- Politics
- The Star
‘Come witness Sabah's 40% revenue entitlement case'
KOTA KINABALU: The Sabah Law Society's (SLS) case on the state's 40% revenue entitlement will be heard by the High Court of Sabah and Sarawak on July 7. SLS immediate past president Datuk Roger Chin said the public is welcome to attend and observe the proceedings, describing it as a rare opportunity to witness constitutional proceedings of major significance. The case centres on whether the Federal Government failed in its constitutional duty to review and pay Sabah its rightful 40% share of net revenue collected from the state, a review that was supposed to take place in 1974 but said to have only happened in 2022. 'This is not a political issue but a constitutional obligation. It is a test of constitutional fidelity and federalism, and every Sabahan has a stake in the outcome,' Chin said in a statement yesterday. He said the case offers Sabahans an opportunity to witness how a key issue concerning the state's constitutional rights is deliberated on. The SLS argues that Articles 112C and 112D of the Federal Constitution, along with Part IV of the Tenth Schedule, entitle Sabah to receive 40% of the net revenue collected by the Federal Government from the state, over and above what was collected in 1963. It contends that the Federal Government was required to review this entitlement by 1974, but no such review occurred until almost five decades later. The Federal Government, however, argues that the 40% formula was replaced by a fixed annual grant of RM26.7mil following a review in 1969, and that continued payments and negotiations over the years fulfil its constitutional duties. Chin said the Sabah government acknowledged that no review occurred from 1974 to 2021 despite it consistently pushing for it. To help the public understand the context of the case, SLS will host a townhall at its secretariat at 3pm on June 20. Those interested can register by calling 088-232 662.
Borneo Post
21-05-2025
- Business
- Borneo Post
SLS to clarify 40% revenue case before court hearing
Roger Chin KOTA KINABALU (May 21): The Sabah Law Society (SLS) will host a townhall session to help the public better understand the legal and historical context of Sabah's 40 per cent entitlement case hearing. The landmark constitutional hearing will be heard before the High Court of Sabah and Sarawak at Kota Kinabalu on July 7 at 9.00 am, and members of the public are entitled to attend and observe. Immediate Past President of SLS, Roger Chin, said it is a rare opportunity for Sabahans to witness an important matter of public interest being considered before the judiciary. At stake is a critical question – has the Federal Government failed in its constitutional duty to pay Sabah its rightful 40% share of net revenue for nearly five decades? Chin said for nearly five decades, this constitutional obligation remained unfulfilled. The pursuit of this case reflects the Society's ongoing commitment to constitutional justice for Sabah — a commitment carried forward through successive Excos. 'This hearing continues the Sabah Law Society's ongoing pursuit of constitutional accountability in relation to the 40% entitlement. The Society's stand on this issue — as clearly stated during the Opening of the Legal Year 2025 in Kuching — is that this is not a political matter but a constitutional obligation, grounded in Article 112C and the Tenth Schedule of the Federal Constitution,' he said in a statement on Tuesday. According to Chin, this case invokes Article 112C and Article 112D of the Federal Constitution, together with Part IV of the Tenth Schedule — provisions specific to Sabah and Sarawak upon the formation of Malaysia in 1963. Sabah is entitled to a special annual grant equal to 40% of the net revenue the Federal Government collects from the state, above the baseline set in 1963. This entitlement was required to be reviewed by 1974. However, no such review occurred until 2022 — nearly 50 years later. SLS is asking the court to determine whether this delay and the absence of appropriate payments during those years — referred to as the 'Lost Years' — amount to a breach of constitutional duty. SLS (applicant) argues that the 40% entitlement is a constitutional guarantee, not a discretionary grant. The Federal Constitution (Article 112C read with section 2 of Part IV of the Tenth Schedule) entitles Sabah to an annual grant equal to two-fifths of the net revenue collected by the Federation from Sabah, above what was collected in 1963. SLS contends that the mandatory second review, due by 1974 under Article 112D, was never conducted, and that the failure to carry out this review — and the resulting non-payment of the 40% entitlement for the years 1974 to 2021 ('the Lost Years') — constitutes a breach of constitutional duty. The Federal Government (first respondent) asserts that the 40% formula ceased to apply after the first review conducted in 1969, which substituted the original entitlement with a fixed annual grant under Article 112D. It maintains that ongoing negotiations from 1974 to 2021 and the continuation of RM26.7 million annual payments satisfy its constitutional obligations. It denies that any arrears are owed and contends that the special grant is subject to periodic review, not an absolute right to 40% of net revenue. The Sabah State Government (second respondent) accepts that no review occurred between 1974 and 2021, but states that it consistently sought a review and entered into interim agreements in 2022 and 2023 without prejudice to its right to rely on the original 40% formula and to pursue arrears. It supports further reviews and, if necessary, a referral to an independent assessor under Article 112D(6). It is on affidavit evidence that the State accepted the interim arrangement due to the 'pressing financial needs of the State'. Chin added this is not just a court case — it is a test of constitutional fidelity and federalism. The outcome could reshape Sabah's finances and redefine the balance of powers within the Malaysian Federation. 'Every Sabahan has a stake in the outcome. As the proceedings are open to the public, whether you're a student, professional, or concerned Sabahan, you may find it meaningful to attend. What happens in this hearing belongs to the public record — and to the people of Sabah,' he said. The townhall session will be held at the SLS Secretariat on June 20 at 3.00 pm. Seats are limited and available on a first-come, first-served basis. To register, call 088-232662.
