There are 200 Government Linked Companies (GLCs) in Sabah that are created to enable economic growth, create jobs for 3.59 million Sabahans and help state Government by generating dividends in terms of contribution.
It was reported that Datuk Seri Hajiji Noor is disappointed over the lower amount of dividends paid by statutory bodies and 200 state-owned GLCs to the Sabah government in 2023.
The reality is, only 10 Sabah GLCs are contributing dividend to the state Government each year and given the upcoming Sabah state election, Hajiji is running out of time to showcase his transformative plans to ensure strong political support to the Madani Government.
In fact, the existing Sabah GLC model failed to generate direct and indirect benefits to 3.59 million Sabahans under Masidi Manjun’s leadership, who has been tasked to restructure Sabah GLCs to generate sustainable income to the state.
Sabah statutory bodies and GLCs paid RM138.7mil in dividends and contributions to the state government in 2023, which was 9% lower than the amount received in 2022. Most loss-making Sabah GLCs continue to exist without concrete plans in place.
In an unsophisticated attempt to increase revenue to the state, Hajiji told each state GLC of Sabah (including the loss making GLCs) to pay RM 1 million dividend, which equates to approximately RM 200 million of dividend each year.
Certainly, this unsustainable approach are best viewed as desperate attempts in managing the optics as political leaders in Sabah are under political pressure to show improvements under the Madani Government led by Prime Minister Datuk Seri Anwar Ibrahim.
Lack of clear direction
Sabah rely on Federal contribution, royalties and other form of payments. Without concrete plans to elevate the Sabah’s economy (which is heavily dependent on natural resources, tourism and oil and gas) through strategic participation of Sabah GLCs and the private sector, the existing strategy led by Hajiji and Masidi Manjun is detrimental to elevate the income households for Sabah.
Both conveniently forgetting that Hajiji and Masidi Manjun were part of the government administration for last 30 years (1994-2024) where most of these state GLCs already existed. Both were state cabinet ministers during the long reign of BN/UMNO in Sabah. Some of these non-performing GLCs were under their ministries too.
Amidst shaky political landscape between Federal and State and constant tussle for financial aids, Sabah Chief Minister Hajiji and Masidi Manjun is running out of time to ensure continuous political support through realignment of power and a combination of powerful optics to transform Sabah.
Under the present leadership, there are many leakages, abuse of power, corruption, and nepotism that are still not being addressed nor investigated by MACC. Appointment of family members and close political associates into Sabah GLCs such as Qhazanah Sabah Berhad were strongly denied despite rising complaints from the public.
Questionable high capital infrastructure projects led by Sabah-state owned Qhazanah Sabah such as the relocation of Kota Kinabalu International Airport (KKIA) from Petagas to Kimanis (59km away from Kota Kinabalu) raises more eyebrows and deemed as unnecessary by aviation experts. The fact that the MOU was signed by Berjaya Land raises more eyebrows due to the close association with the former Prime Minister Tun Mahathir.
The loss of confidence by analysts and business leaders in Sabah on the transformative changes under Hajiji is growing, with daily and strategic state affairs led by his long term associate Masidi Manjun which does not seem to bear any fruits.
Sabah’s key economic enablers led by 200 state-owned GLCs are not longer seen as a viable option to help the state in any form, shape or sizes.
The fact is the bulk of the yearly dividend to the state was attributed by Sabah Maju Holdings (SMJ) Sdn Bhd (SMJSB), a new-entity set up by Hajiji which raises RM 900 million Sukuk and subsequently paid RM50mil to state in 2023. The bulk of the dividend is potentially contributed SMJ’s shining subsidiary, SMJ Energy, which is led by technical advisor Datuk Panglima Lim, who is also interestingly appointed as the Sabah Development Berhad (DB) Chairman, recommended by Hajiji.
What is worrying is that other Sabah GLCs are scrambling to find creative ways to declare dividends each year. Agencies such as Sabah Credit Corporation (RM17mil), KKIP Sdn Bhd (RM12mil), Sabah Energy Corporation Sdn Bhd (RM12mil), Innoprise Corporation Sdn Bhd (RM3.568mil) and Desa Plus Sdn Bhd (RM2mil) are amongst smaller GLCs that are subjected to immense performance pressure to declare dividends against the backdrop of unfavourable economic conditions and lack of economic transformation strategy in Sabah.
And lest we forget, there are 200 GLCs in Sabah that are either heavily subsidized by tax payer’s money, or running on debt (loans from the issuance of Sukuk bonds) too.
Sabahans are watching impatiently
The undercurrent is strong as Sabahans are watching closely the shaky political climate in Sabah under Hajiji’s leadership.
Attempts to strengthen the powerbase from grass roots effort to mitigate the dwindling support from UMNO comrades amidst Zahid’s debacle with Najib remain futile as Hajiji is misled into the wrong policies and relying too much on his fellow comrades such as Masidi Manjun, who advises and control the bulk of the state finances and economic affairs.
In fact, this makes Masidi Manjun unassumingly the most powerful and influential person in Sabah. As a civil servant for more than 30 years, it is surprising that only 10 GLCs (out of 200 GLCs) manage to deliver dividends to the state Government.
Creation of new state-GLCs such as SMJ Sdn. Bhd which Hajiji is extremely proud off may not hide the fact that there is still an elephant in the room.
Is Hajiji and the present leadership taking the necessary steps to stop the bleed from 190+ non-performing GLCs?
The only “performing” GLCs that was painted to the public is SMJ Energy’s capital raising of RM 900 million and the ability to pay dividend of RM 50 million to the state after 2nd year of inception.
Is SMJ positioned to win for political mileage for optical reasons?
The same can be said on other Sabah state GLCs such as Qhazanah (mirroring Federal-owned Khazanah Nasional Berhad) which may exist for strategic political reasons despite its loss-making investments that are not made known to the public.
Transparency
With no clear economic transformation and policies in mind for Sabah, the 200 GLCs and the private sector continue to suffer from recording sustainable growth since Hajiji and Masidi took over.
New GLCs were created. New CEOs with strong political alignment to the ruling leadership in Sabah were appointed with high-paying salaries. More debts were raised ala 1MDB to fund new projects and to accommodate high operating costs.
In fact, the level of transparency of expenses the 200 Sabah GLCs are relatively unknown to the public, let alone communicated through roadshows.
Ex investment banker, Datuk John Lo expressed his concern of the performance of Sabah GLCs, and he said that “Sabahans have the right to know the salaries, perks and benefits of all the chairmen, all the directors and senior management of the loss-making GLCs and the total cost of maintaining them in their comfy positions each year”.
In fact, these are the hard questions that should be raised in the state assembly and elected representative. For the sake of a better Sabah, transparency in the appointment of board, chairman and advisors are still lacking.
One should realize that the approach should not be to “pressure” the Sabah GLCs to “perform” as dictated by Finance Minister Masidi Manjun in many of his past statements. Instead, a thorough review and transparency into the expenses, investment and remuneration structure should be in place before looking at the revenue levers, potential growth and the commercial viability or socio-economic impact to the Sabahans.
Parting Thoughts:
The bashing of state GLCs by Sabah leaders is just like flogging a dead horse. The business community is of the opinion that most GLCs are inherently inefficient, politically controlled, bloated, managed like government agencies with many CEOs devoid of corporate vision and strategic objectives.
More so that the CEO of Sabah GLCs are appointed and controlled by Hajiji and Masidi Manjun, especially those who are loyal to the party; a predicament that continue to exist in the Madani Government, led by legacy practices that continue to haunt Sabah.
The present administration in Sabah have demonstrated the lack on overcoming the socio-economic issues, balancing the books whilst navigating the fear of political backlash vis-a-vis restructuring the non-performing GLCs whilst massive unemployment in Sabah is still plaguing the state affairs.
As Sabahans are running out of patience, the looming issues of dwindling political support from business people and poor Sabahans is far from over, with legacy issues not being handled well by the current Prime Minister, Datuk Seri Anwar Ibrahim.
The Madani Government is struggling to intervene into Sabah’s state economic affairs or provide the right decisions, guidances or policies for the GRS government to shine. The series of miserable failures to tackle the infrastructure issues like water, power and roads, coupled with fixing nonperforming state GLCs require a strong leader to transform Sabah to realize its full potential.
Once again, it is back to the voters to choose the right leaders as Sabah remains the heart of Borneo that Malaysians are proud off.
Let Sabah shine under the right leadership.
2 Responses
👋☝️Read this to the end and acknowledge that we indeed are in a bad economic and financial shape!!😰😰
The appointees are a disappointment. SKN has to look into his mirror