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Focus Malaysia
2 days ago
- Business
- Focus Malaysia
Sabah's GRS gov't steps up accountability with RM1.97b lawsuit against global audit giant EY
THE Sabah state government under Gabungan Rakyat Sabah (GRS) is continuing to signal a firmer commitment towards transparency and accountability in managing state institutions. Towards this end, the Sabah Development Bank (SDB), one of the state's most important financial institutions, has filed a RM1.97 bil lawsuit against global audit giant Ernst & Young (EY), alleging negligence in its audit work between 2017 to 2022, sources told FocusM. According to court documents sighted by FocusM, EY is accused of failing to detect serious financial irregularities during its audits, contributing to the accumulation of more than RM2.2 bil in non-performing loans (NPLs) and substantial losses for SDB. Initiated after an internal review under the Sabah leadership, the lawsuit marks a decisive step by the GRS administration to address long-standing financial problems at the bank. The case also represents a broader effort to safeguard public funds and reinforce integrity across government-linked institutions. In its statement of claim, SDB outlined 17 key points of alleged audit negligence by EY, including: Failure to detect over RM2.2 bil in NPLs Weak internal controls and failure to identify credit risks Reliance on outdated collateral valuation reports which lead to asset misstatements Audits conducted without professional scepticism Use of 'creative accounting' to mask financial weaknesses through loan 'evergreening' practices EY is also accused of having been aware of the true extent of asset impairments since 2017 but failing to advise SDB to make appropriate provisions, allegedly to maintain a positive financial image for the bank in order to support its bond and market borrowings. Clamping down on mismanagement On July 10 last year, State Finance Minister Datuk Masidi Manjun disclosed in the State Legislative Assembly that as of May 2023, a staggering 75% of SDB's RM6.6 bil loan portfolio had turned non-performing or impaired. He revealed that the former management had engaged in 'creative accounting' whereby new loans were issued to delinquent borrowers to repay old debts, thus masking the true extent of the NPL problem. Between 2017 and 2022 alone, the previous leadership allegedly 'fabricated' RM580 mil in book profits by recycling credit and recording unpaid interest as paper gains. Worse, many loans were approved without proper due diligence, allowing unqualified borrowers to tap into public funds. The bank's bond-driven funding model also worsened its liabilities as repayments fell short of bond maturities, thus forcing SDB to borrow further just to stay afloat. While financial mismanagement of this scale would once have been quietly buried, the present administration has chosen transparency. 'Cleaning up the dirt' The move comes as part of a wider approach under Chief Minister Datuk Seri Hajiji Noor's leadership. Based on new report, several individuals, including GRS assemblymen, are expected to be charged in court soon over alleged misconduct involving state-issued mining licenses. Throughout that investigation, the Sabah state government has publicly committed to giving full cooperation to the Malaysian Anti-Corruption Commission (MACC) with no political interference. The MACC has since clarified that the Chief Minister was not among those under investigation, and enforcement officials acknowledged the state's openness during the probe. Together, these developments point to a shift in Sabah's political and administrative culture that prioritises public accountability over political convenience. In SDB's case, EY was continuously appointed as external auditor by the previous state governments. However, it was only after the GRS government took over the state administration and new management was appointed at SDB that the true scale of the losses was uncovered. Since assuming oversight of SDB in mid-2023, the GRS administration has taken steps to overhaul the bank's governance. The bank was formally placed under the Chief Minister's Incorporation and the State Treasury with the new board launching sweeping reforms. These include a full internal audit, re-classification of loans in line with Bank Negara Malaysia (BNM) standards and legal action against 43 NPL borrowers. Professional recovery agencies have been engaged with the board targeting the recovery of RM1 bil in NPLs annually over three years. In the first year alone, SDB recovered RM1.9 bil in legacy loans from government-linked companies (GLCs) while reducing the bank's bond obligations from RM5 bill to RM3.3 bil. In early 2024, SDB rejected RM1.5 bil worth of new loan applications after stricter credit reviews, signalling a renewed focus on financial discipline. Very broadly, this lawsuit sends a clear message that even large corporate players will be held accountable if public interests are harmed. It also underscores the expectation that auditors, banks and other state-linked entities must meet higher governance standards going forward. Looking ahead, the GRS-led government is expected to pursue further improvements to financial oversight across state agencies and government-linked companies. The ultimate aim is to prevent a repeat of past failings, ensure stronger protections for public funds and build public confidence in Sabah's key institutions. As the state continues to focus on economic development, job creation and investor confidence, this latest move shows that governance reforms remain a key part of the agenda. – June 19, 2025 Main image credit: Sabah Development Bank's website
Malay Mail
12-06-2025
- Politics
- Malay Mail
Sabah Umno clarifies cautious stance on coalitions, vows not to repeat past mistakes
KOTA KINABALU, June 12 — Sabah Umno has clarified that Barisan Nasional's (BN) current political stance should not be interpreted as a complete rejection of cooperation with other parties, but rather a cautious approach shaped by past experiences. In a statement released by Sabah Umno information chief Datuk Suhaimi Nasir, the party reiterated that BN is not closing its doors to political collaboration. However, any decision to form a coalition must be rooted in the people's interests, the need for state stability and lessons drawn from past political developments, especially those surrounding the 16th state election (PRN16). The statement comes in response to Gabungan Rakyat Sabah (GRS) secretary-general Datuk Seri Masidi Manjun's statement recently, saying the coalition shares the same sentiment regarding Sabah BN's reluctance to team up in PRN17. However, Masidi said they have not made a firm decision on the matter until the Supreme Council meeting, which is expected to take place either this month or early July. 'During the last state election, certain political collaborations led to unfavourable consequences for BN, particularly in terms of integrity, trust and a shared political direction,' Suhaimi said. 'This is not merely about ideological differences, but also about political sincerity and consistency in leadership,' he added. He emphasised that Sabah Umno and BN's current approach is to assess any potential alliance objectively, rationally and strategically, without haste or in response to short-term political demands. 'We will not repeat past mistakes, nor will we allow Sabah Umno to once again be placed in a political position that sidelines the voices of our grassroots members,' Suhaimi added. He also stressed that determining Sabah's future should not be reduced to a numbers game of how many parties can come together at the negotiating table. Instead, it must be about forming a coalition that can ensure long-term stability, integrity and development for the people. Sabah Umno and BN's decision to adopt a more cautious stance, Suhaimi said, is a constructive step, not a confrontational one. — The Borneo Post
The Star
11-06-2025
- Business
- The Star
Smart card aid eases financial burden for Pitas students
KOTA KINABALU: For 15-year-old Alexa Grace Zulkeplee, every ringgit counts. A Form Three student at SMK Kanibongan in Pitas, she receives a modest monthly allowance of RM40 from her father, who operates a small farm. "On school days, I usually spend just RM1 for food. That gets me through until lunch, which is provided at the hostel," she said. As the fourth of five siblings, she's always been mindful of her family's financial constraints, purchasing only essentials from the school cooperative. Thanks to a Corporate Social Responsibility (CSR) programme by Sabah-owned oil and gas company SMJ Energy Sdn Bhd, she and 631 other students now benefit from a smart card assistance scheme. The project, organised with the MyKasih Foundation, provides RM100 in monthly aid credited to smart cards, functioning like debit cards for purchasing school supplies and food items. The initiative aims to ease the financial burden on B40 families and reduce barriers to education. Finance Minister and SMJ Energy Sdn Bhd chairman Datuk Seri Masidi Manjun (back row, third left), SMJE chief executive officer Dr Dionysia Kibat (back row, fourth right) and MyKasih Foundation deputy deputy chairman Jeffrey Perera (back row, third right) were all smiles with the smart card recipients during a simple launch at SMK Kanibongan in Pitas on Tuesday (June 10). "I am really happy to receive this card because we don't have much. It helps lessen the burden on my parents," Alexa said. Recognising Pitas as one of Sabah's most impoverished districts, the programme targets four primary and three secondary schools, benefiting over 2,000 students from low-income households. "Pitas remains one of the most underdeveloped areas in Sabah. Roads and infrastructure are lacking, but development takes time. "The key lies in our attitude, whether we give up or rise to the challenge," said Finance Minister Datuk Seri Masidi Manjun, also SMJE chairman. Sharing his own rural upbringing, Masidi recounted how his family had no roads and the nearest secondary schools were in other districts. Despite the challenges, he saw them as opportunities to escape poverty. "Fate is in God's hands. God gave each of us a brain, a set of eyes, hands, and legs. God also gave us the ability to think and shape our own destiny. Finance Minister and SMJ Energy Sdn Bhd chairman Datuk Seri Masidi Manjun presenting the smart card to one of the SMK Kanibongan recipients, while SMJE chief executive officer Dr Dionysia Kibat (second right) and MyKasih Foundation deputy deputy chairman Jeffrey Perera (right) look on. "Do not be ashamed of being poor, but be ashamed only if you are not working hard to rise out of it," he said. This collaboration between SMJE and the MyKasih Foundation in Pitas is the first of its kind. Student affairs coordinator Ismail Alibah noted that students were selected based on need, with applications verified by MyKasih. Of the 660 applicants, 632 were chosen. Those not selected typically came from families with higher incomes. The smart cards can be used only at authorised outlets for essentials, with transactions monitored to ensure proper use. The CSR initiative will run until the end of the year, with SMJE estimating expenditure of around RM1 million. Its effectiveness will be reviewed to decide on continuation or expansion to other districts. Besides SMK Kanibongan, the participating schools include SMK Bongkol, SMK Telaga, and four primary schools: SK Dallas, SK Kanibongan, SK Sosop, and SK Datong. Kibat, SMJE's CEO, emphasised the importance of investing in people, especially children, as the true wealth of Sabah. "We look forward to working with like-minded organisations and individuals to expand this programme further," she said.
New Straits Times
11-06-2025
- Politics
- New Straits Times
GRS yet to finalise PRN17 alliance decision
PITAS: Gabungan Rakyat Sabah (GRS) has expressed the same view as Sabah Barisan Nasional (BN) in refusing to cooperate for the upcoming 17th Sabah State Election (PRN17). GRS secretary-general Datuk Seri Masidi Manjun, however, said the coalition has yet to make a final decision on any political cooperation until its supreme council meeting, expected to be held later this month or early next month. "We have not held a Supreme Council meeting to decide on this matter yet. "However, I believe the president has met with all the component party presidents, and I'm sure he has also had informal meetings with Pakatan Harapan (PH) leaders. "Only after gathering feedback from all members and component parties can we decide whether to go solo or work together," he said when met by the media after launching the Cinta Sekolah Saya (Love My School) programme for the Pitas district at Sekolah Menengah Kebangsaan (SMK) Kanibongan on Tuesday. Masidi was responding to questions on whether GRS would collaborate with BN and PH in the coming state election. He also said that the Chief Minister, who is also GRS Chairman, has repeatedly stressed his preference for a PH-GRS alliance going into the election. According to Masidi, the main rationale behind continuing the PH-GRS partnership is to ensure political stability. He cited Sarawak as an example, pointing out that the state enjoys strong political stability, which has clearly contributed to its ability to focus on economic development. When asked whether GRS would proceed independently if PH and BN , currently partners at the federal level decide to join forces for PRN17, Masidi said such a situation could be interpreted in many ways. "BN/Umno Sabah leaders have repeatedly expressed that they do not want to collaborate with GRS. "That's the rather unpleasant reality. "GRS members and leaders have frequently stated that they feel more comfortable with PH while waiting for decisions on allocations and seat distribution.
Daily Express
10-06-2025
- Business
- Daily Express
Over 2,000 Pitas students to benefit from SMJ Energy's education programme
Published on: Tuesday, June 10, 2025 Published on: Tue, Jun 10, 2025 Text Size: PITAS: SMJ Energy Sdn Bhd, in partnership with MyKasih Foundation, has launched an education-focused CSR initiative benefiting over 2,000 students from seven schools in Pitas. Advertisement The programme, launched by Sabah Finance Minister Datuk Seri Masidi Manjun, provides cashless aid for meals and school supplies via school canteens and cooperatives. The initiative targets students in three secondary and four primary schools using digital payment systems to ensure transparency and direct support. Masidi emphasized the importance of equal educational opportunities, especially in socioeconomically challenged districts like Pitas. MyKasih Foundation will oversee implementation and impact reporting. * 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
