KOTA KINABALU – Sabah Forest Industries Sdn Bhd (SFI) has been granted an extended restraining order against Pelangi Prestasi Sdn Bhd, which is linked to tycoon Tan Sri Syed Mokhtar Albukhary.
Local dailies reported that the high court here granted SFI a nine-month extension from July 14 to allow the ailing company to negotiate its obligations with creditors, as well as delay a suit brought by Pelangi Prestasi.
The court reached the decision after hearing submissions from both firms, and reviewing the affidavit submitted by SFI acting director Lai Chee Chuan.
Pelangi Prestasi moved to acquire 98% in SFI from India-based pulp and paper manufacturer Ballarpur Industries for RM2 billion, with the consent of the then Barisan Nasional Sabah government led by Tan Sri Musa Aman in April 2018.
Under the sale and purchase agreement (SPA), the Syed Mokhtar-linked company will assume control of SFI, including all its assets, land titles and timber licences.
SFI, which was facing financial problems, was put under the receivership and management of Grant Thornton before the deal was signed.
Pelangi Prestasi subsequently went to court over a decision made by the previous Warisan state government after the general election in May 2018 not to issue fresh timber licences to SFI, and instead, impose an entirely new set of preconditions in order to grant the said licences.
A month before signing the SPA, the BN state administration had agreed to approve new timber licences for Pelangi Prestasi if it fulfilled the prerequisites in the deal.
The company, in its suit, said it had paid the salaries of SFI employees in full since March 2018, including shortfalls between January and March that year.
The wages were paid even up till March last year, amounting to RM23.1 million, hence, the company fulfilled part of the prerequisites set by the state government, said the suit. – The Vibes, October 23, 2020
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