In May a decision by the Federal Court was reported as being the ‘end of the road’ for the Sipitang based Sabah Forest Industries (SFI) wound up by the courts last year. Their appeal was refused and an RM80 million compensation order by a lower court rescinded.
However, the legal complaints by the receivers that the company’s woes owe to a conspiracy and collusion between the state government and one of Malaysia’s richest men continue, according to litigants.
The receivers for the company, Grant Thornton had originally accepted a RM1.2 billion buy out offer from Syed Mokhtar for which they received a 10% down payment in 2017. However, instead of completing the deal, the accountancy giant says that Mokhtar then immediately reneged on his commitments and started to conspire with the incoming Sabah administration to squeeze SFI out of its assets to enable him to acquire the company for free.
Sarawak Report has already reported how the Sabah administration first confiscated the licenses on which the company value was based, on grounds of ‘public interest’, and then handed over the self-same licenses to companies said to be acting on behalf of the state, but which were in fact owned by Mokhtar himself.
By this means Mokhtar had acquired the company without having to put down the rest of the RM1.2 billion he had originally offered, argue the outraged stakeholders of SFI. Mokhtar has even sued to get back the RM100 million he did pay as his deposit.
[The] Sabah Chief Minister literally nationalised (compulsorily acquired) all SFI assets and offered only 200m (not a cent paid to date) instead of the 1.2bn tendered by SM in 2018. The Chief Minister in turn had awarded all SFI forest concessions (288,000 ha) for free to three Syed Mokhtar controlled companies. Syed Mokhtar sued SFI for the return of the 10℅ deposit paid, and offered to used that deposit in a global settlement including SFI’s claims against Sabah State and Chief Minister. In short, the collusion/conspiracy between Syed Mokhtar and CM to defraud SFI is as clear as daylight.
is how an ally of the litigating parties summarised the situation to Sarawak Report. Meanwhile, it is the company workers who have suffered most during this on-going wrangle, not least because they have apparently been targeted by the state itself due to its collaboration in undermining SFI.
Some 500 workers and their family members had been accommodated in SFI’s forestry worker settlements who were suddenly made redundant. Their wages were stopped in XXX and they received no redundancy settlements.
As the legal battles raged from 2019 the state electricity company simply switched off supplies to these isolated communities leaving them without basic amenities and forced to live off the land as best they could. The objective would appear to have been to drive this community from the area, thereby breaking up the workforce.
Likewise, the abandoned factories were mysteriously vandalised with expensive machinery belonging to SFI sabotaged as part of what appeared to be a coordinated attempt to undermine the company that the liquidators were seeking to sell as a going concern.
Sarawak Report has documented other abuses, such as apparent illegal logging of the area which the state authorities sought to justify on the grounds that diseased trees were being removed (Sarawak Report identified the timber was nonetheless being exported to Sarawak – in total violation of health controls had the trees genuinely been diseased).
Now, there has been another development in that campaigners for these workers have called foul over the ‘disappearance’ of a promised state fund of no less than RM130 million that had been announced back in 2022 to bring compensation and support to help this abused and beleaguered community.
The allegation goes back to a question in the State Assembly put in November of that year on behalf of his constituents by the then Sindumin (Sipitang area) YB Dr Yusof Yacob to the Chief Minister asking whether any form of compensation had been provided to the workers of SFI?
The Chief Minister, Hajiji Noor, replied with a major commitment claiming:
“the State Government has provided approximately RM130 million in financial assistance to affected workers and their family members through a special fund established specifically to assist those who lost their source of income following the cessation of SFI’s operations”.
Three and a half years later, the community champions complain, none of those families have seen a shred of support from any such fund. The YB had recently quit the opposition Warisan Party to act as an ‘independent’ more friendly to the GRS ruling coalition and appeared not to pursue the matter further.
It has taken the election of a new member to the seat at the state election allied to the opposition to get the issue raised once more. YB Yusri Pungut is a newly elected Assemblyman representing Warisan. He is a lawyer by profession and during the recent State Legislative Assembly sitting, he questioned the Chief Minister about the RM130 million Special Fund, asking whether the money had already been distributed to the former SFI workers and, if so, who had received it. The Chief Minister responded he would reply with a written answer which is currently still awaited.
It was this state of affairs that prompted a report made to the Malaysian Anti-Corruption Commission last month, making the point that the Hansard record of that interchange in 2022 makes clear that money had already been set aside in a fund supposedly to support these workers.
Speaking on behalf of the workers Jeffridin Baudi has therefore asked for an investigation into what has happened to that money?
Matters he wants clarified on behalf or workers families, “many of whom continue to suffer from loss os employment and income” are:
- The destination and use of the RM130 million ‘Special Fund’
- The parties responsible for administering and distributing the fund;
- The list of recipients, amounts paid, and the methodised to distribute the funds; and
- Whether there was any element of abuse of power, criminal breach of trust, misappropriation, corruption, or other misconduct in relation to the management of the fund.
These are, of course, matters that any properly transparent State Government would have made public years ago in taking responsibility for the rights and wellbeing of citizens without jobs thanks in a large degree to state policy. According to Baudi, the MACC/SPRM has indicated it is now investigating the matter instead giving hope that answers not provided from political sources may be obtained by the anti-corruption forces instead.