One of Sabah’s many under-reported public scandals that Sarawak Report has been covering for over a year – namely the grabbing of the assets of the once flourishing Sabah Forest Industries (SFI) by the state government, apparently for the benefit of Malaysia’s version of Elon Musk (Syed Mokhtar) – has taken a historic turn.
For the first time ever, a chief minister of Sabah has been taken to court over a civil claim of Misfeasance – in common language, corruption and abuse of power. Even against the corruption records of predecessors such as the present Governor that is a sobering development, and the lengthy Statement of Claim just lodged with the Kota Kinabalu High Court does not mince words.
As plaintiffs, the receivers representing the shuttered plantation, forestry and pulping concern accuse the first defendant, the chief minister personally, together with the second, his state government of Sabah, of:
“maliciously abus[ing] his power” by terminating timber licences awarded to SFI “only to subsequently award the same concession lands to 3 companies controlled by TSSM [Syed Mokhtar] without proper justification whatsoever”.
and:
“maliciously abus[ing] his power by causing the compulsory acquisition of 15 pieces of the 1st Plaintiff’s lands on the guise of public interest and without disclosing the true intention of scheming the 1st Plaintiff of its assets to pave the way for its takeover by TSSM [Syed Mokhtar]”.
The years long battle over these assets worth at least RM1.2 billion (the price that the billionaire government-friendly businessman Syed Mokhtar had originally agreed to pay for them) has therefore ended in a straight accusation by the receivers that the chief minister has abused his powers of office to benefit Syed by confiscating what belonged to SFI, on a false pretext of public interest, in order to hand them to the businessman instead.
Tuesday’s local headlines were inevitably dominated by frantic rebuttals by Hajiji and his supporters against such a bold and adamant series of unprecedented charges.
“The Chief Minister of Sabah and the State Government unequivocally deny all allegations of misfeasance in public office,” thundered the State Attorney-General in a statement calling the lawsuit “frivolous and vexatious”.
“The Chief Minister of Sabah and the State Government unequivocally deny all allegations of misfeasance in public office,” Brenndon Keith Soh was obliged to announce.
As Sarawak Report has previously outlined the denials are pitched against some persuasive facts that lend support to SFI’s protests. Indeed, a ruling by the High Court has already sought to stay activities on the lands appropriated by the state (in the name of ‘public interest’) until the matter is settled by the courts.
Nonetheless, with the evident backing of the state government through Yayasan Sabah and the forces of law and order, logging has proceeded to extract from SFI’s planted forests in defiance of the court order and SFI have been prevented from entering their own premises to extract valuable machinery that has now been wrecked by vandalism.
Sarawak Report has reported on the highly dubious excuse by the state agency that it has been logging the valuable timber on the grounds that it was “diseased”.
Forestry bosses angrily criticised our article, however they have yet to explain why this “diseased timber” is nonetheless being visibly exported on barges destined for Bintulu and possibly beyond. Surely, a potential serious breach of regulations to prevent the transmission of infectious contamination should be immediately stopped? The agency has yet to answer for its actions.
History of Intimidation?
The history underpinning the action by the receiver, Narendrakumar Chunilal Rugnath, better known as Narendra Jasan, managing partner of accounting firm Grant Thornton in Malaysia, begins with an original agreement entered into with Syed Mokhtar to sell him the distressed SFI business and its forest based assets for RM1.2 billion in 2017.
Mokhtar paid a 10% deposit but shortly before the completion date, it is alleged, the businessman experienced his own cashflow problems and sought to avoid payment of the rest, whilst apparently still aspiring to take control of the business.
Certain requirements had been put in place by the intervening Warisan government, which had judged Syed’s company Pelangi Prestasi Sdn Bhd (a made for purpose entity with no background in the forest management business) to be insufficiently equipped for the role. These the tycoon also apparently balked at.
On taking office the Hajiji coalition came to the rescue, as far as Mokhtar was concerned, by taking some dramatic actions. Hajiji first announced an executive order compulsorily acquiring the land ‘in the public interest’ to which he attached a ‘compensation offer’ that more or less matched the sum of money that Syed had already passed to Grant Thornton.
It was at this point that things got extremely nasty because, as the receivers rallied to resist the order in court, action was taken against Mr Narendra Jasan that he understandably regarded as a form of naked intimidation to soften up his company’s handling of the affair.
Syed Mokhtar’s company denounced the receiver personally for alleged money laundering and mishandling the deposit in a criminal manner.
In September 2022 the senior professional accountant had found himself arrested and charged on eight counts of alleged ‘criminal breach of trust’ by public prosecutors. According to reports this was “in his capacity as a manager and receiver of Sabah Forest Industries Sdn Bhd (SFI) over deposits belonging to Pelangi Prestasi Sdn Bhd, a firm owned by tycoon Tan Sri Syed Mokhtar Albukhary that was vying to take over SFI.” [The Edge Newspaper].
Suffering in Sipitang
Speaking to Sarawak Report, Darell Leiking, Deputy President for Warisan and state assemblyman for Moyog, said his party is very concerned over the allegations of corrupt practices.
“It is of concern what was and is the intent of taking and alienating the lands to other entities. We need a full audit of why it was done and if it should have been at all. Otherwise, this could happen to any other parties who have lands and licences which could be acquired under a so-called public interest. The intent matters as abuses can happen by Authorities,” he said.
Warisan’s representatives also plan to demand answers over the other matters related to SFI during the upcoming State Assembly Session, says Leiking, including the expose made by Sarawak Report on an apparent ongoing removal and export of logs that were claimed to have been diseased notwithstanding a court order against the same.
The Assemblyman lamented not only the only the alleged evidence of irregularities in the handling of this matter by the present chief minister but what he saw as a long history of policy failures towards SFI which was once a well managed business owned by the Sabah State before being sold off to commercial concerns for reasons he says are known only to the Government.
During those material times he says assets were stripped driving Sabah’s once flourishing very own Pulp & Paper concern into bankruptcy.
“Any Government should try to sort this out as quickly as possible and in the best Interest of all Sabahans. The Government should pay what needs to be paid and honour their original stated intentions to SFI and ensure that the Industry at Sipitang should be revived with vigour more so during these challenging times globally. They need to put Sabah first again,” he said.