MACC probing alleged abuse in bank’s loan approvals


KOTA KINABALU: The Malaysian Anti-Corruption Commission (MACC) is examining possible abuse in the issuance of loans over the years at state-owned Sabah Development Bank (SDBank), says Datuk Seri Masidi Manjun.

The state Finance Minister said the new SDBank board and management had lodged a report with the MACC in April this year to look into the allegation of abuse in the issuance of loans.

“When the new board was appointed in July 2023, SDBank was in a dire financial position.

“The real number of non-performing loans (NPLs) was sky-high, funding was inadequate to meet maturing bond obligations and recovery actions were passive and slow,” he said.

He was replying to a question from Datuk Seri Shafe Apdal (Warisan-Senallang) at the state assembly sitting yesterday.

He said a division was set up within SDBank, led by a highly qualified recovery specialist, to aggressively recover the NPLs.

“As of the end of June this year, all 43 NPLs have had legal actions taken. The new board has set a KPI (key performance index) of RM1bil in NPL recovery per year for the next three years, and will no longer entertain loan applications from Peninsular Malaysia companies,” Masidi added.

He said the total amount of loans approved to companies in the peninsula from 2003 to 2018 was RM8bil with 95% in the property development sector in Kuala Lumpur, Selangor and Johor.

Masidi said the new team had been conducting a rigorous review on the bank’s operations by enhancing policies, standard operating procedures and adopting industry practices as well as Bank Negara guidelines.

“They have also reclassified loans into NPLs as they should be. As of July last year, the NPLs was 47% and by end of May this year, it was 75%.

“With the support of the state government, the new board and management have been able to resolve the bulk of ‘legacy’ loans from government-linked companies (GLCs),” he said.

In September last year, SDBank’s borrowings stood at RM5bil, which was reduced to RM3.9bil by end of May this year.

“One high-profile GLC legacy loan is the huge Sabah International Petroleum (SIP) loan with SDBank. SMJ Energy acquired SIP and used the cheap sukuk funds to settle a RM700mil SIP debt to SDBank, thus achieving interest savings of RM60mil for 2024 alone.

“This allowed SDBank to settle its bond repayment obligations without rolling over,” he added.

He said SDBank’s current team was guided by a new mandate to pursue development projects that were economically and socially meaningful, and environmentally responsible in Sabah only.

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MACC , Masidi Manjun , SDBank

   

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