Sabah GLC investments undergo strict scrutiny, no bailouts

 By Olivia Miwil

July 21, 2026 @ 7:18pm

Sabah Finance Minister Datuk Seri Masidi Manjun says investment proposals involving Sabah government agencies are subject to rigorous evaluation by the State Agencies’ Loan and Investment Committee. NSTP file pic

KOTA KINABALU: Investment proposals involving Sabah government agencies are subject to rigorous evaluation by the State Agencies' Loan and Investment Committee.

State Finance Minister Datuk Seri Masidi Manjun said the committee assesses each proposal based on project viability, expected returns, risk, due diligence, and whether it aligns with the state's policies and strategic interests before making recommendations to the State Cabinet.

"As such, it is inaccurate to describe these allocations as bailouts for underperforming government-linked companies (GLCs)," he said in his winding-up speech for the Supplementary Supply Bill.

The bill, which was tabled yesterday and debated by 42 assemblymen, was passed at the state legislative assembly today.

Masidi, who is also deputy chief minister, said the state government had set a target for GLCs in which it holds equity to pay dividends of at least 10 per cent of their profit after tax, subject to their financial position and operational requirements.

On the supplementary equity allocations, he said RM200 million has been allocated to Sabah Development Bank Bhd (SDBank) and RM10 million to POIC Sabah Sdn Bhd.

The RM200 million allocation for SDBank is not a fresh cash injection but a phased accounting adjustment to convert the Sabah government's existing fixed deposits into Redeemable Preference Shares (RPS) as part of the bank's transformation plan to strengthen its capital position.

Previously, the fixed deposits earned interest of 2.95 per cent over a nine-month tenure.

Following the conversion to RPS, the state stands to receive dividend returns of 3.15 per cent annually, subject to the terms of issuance and SDBank's financial performance.

The RM10 million allocation for POIC is an equity injection to finance operating costs and support the company's continued role as the developer of the integrated industrial park in Lahad Datu.

Meanwhile, on delayed development projects, Masidi said the state government had strengthened its monitoring mechanism to improve project delivery.

"Through the Sabah Economic and Development Project Information System, the government tracks both physical and financial progress.

"It has also enhanced the role of the State Development Action Committee to improve the monitoring of project implementation, planning and approved allocations."