WHY SDB APPROVED RM601 MILLION LOAN TO KL BASE COMPANY?

The Sabah government owes the people of the state an explanation why a RM601 million loan was given by the Sabah Development Bank (SDB) to a Peninsular-based company to develop a luxury condominium project in Kuala Lumpur, said Sabah Progressive Party (Sapp) president and former chief minister Yong Teck Lee today.yongtlsappflag2
 
As reported in the business section of a national newspaper on Thursday, a property developer, Perspektif Masa Sdn Bhd, has secured multi-million ringgit loan from SDB to finance their RM1.5 billion project in Kuala Lumpur’s Ampang area.
 
In a statement to Malaysiakini, Yong said the loan is certain to raise eyebrows as it is one of the biggest loans ever granted by SDB.
 
He described the loan sum as equivalent to the RM600 million in infrastructure grants allocated to the state of Sabah under the second economic stimulus package for the next two years.
 
Such a huge loan, if disbursed in Sabah, would have been a huge stimulus to the Sabah economy, he pointed out.
 
But instead, the Sabah government-owned bank has seen it fit to lend the money to a Kuala Lumpur-based firm as though Sabah has no need of any investment funds, the former chief minister said.
 
“The local business community knows that banks have been very tight in lending money these days because of the global financial crisis,” he said, yet SDB seems not to know or care.
 
He called on SDB to disclose whether such a huge loan outside Sabah has obtained the approval of the state government.

Loss of investor confidence

“The people of Sabah deserve to know whether SDB has departed from its primary role as the leading financial institution to promote the growth of the Sabah economy,” Yong said.
 
“According to Chief Minister Musa Aman, who is also the finance minister overseeing SDB, Sabah has many attractive investment projects created under the Sabah Development Corridor. Don’t these corridor projects need financing?
 
“Or is it because our own Sabah Development Bank has lost confidence in the Sabah economy? Are there no projects in Sabah that are viable to qualify for SDB loans? Are there no more projects that can be profitable for SDB to lend to?”
 
The Sapp leader said SDB and state officials must not underestimate the potential for loss of investor confidence when investors see that Sabah’s own development financial institution has decided to channel a huge chunk of its loan portfolio to non-Sabah projects.
 
‘Leaders do not seem to care’

“Already, there is widespread concern over the untimely closure of the ceramic tile factory in Labuan this month caused by the hike in natural gas prices sold by the Sabah Energy Corporation (SEC) to a Sedco subsidiary, Guocera Tiles Industries (Labuan) Sdn Bhd,” he said.
 
Sedco, or Sabah Economic Development Corporation, is a state Bumiputra agency dedicated to developing Sabah’s industrial sector.

In spite of the wide media coverage of the controversial closure of the Labuan tile plant, none of the state government ministers or officials have bothered to explain or show any concern over the matter, according to Yong.
 
Other than losing jobs, the plant closure also affects investor confidence.
 
The former chief minister said: “In Sarawak, Penang and other states, news of similar factory closures are promptly attended to by senior ministers. Here in Sabah and Labuan, senior leaders do not seem to care.”

Last Updated on Sunday, 15 March 2009 20:44

 

1 Comment

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One response to “WHY SDB APPROVED RM601 MILLION LOAN TO KL BASE COMPANY?

  1. Interesting blog, I’ll try and spread the word.

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