SANDAKAN – The state has decided to end the logging contract given to Sabah Forest Industries Sdn Bhd (SFI), the paper mill company hit with controversy in relation to the non-payment of salaries.
SFI, which is under the receivership and management of audit and tax firm Grant Thornton, was initially allowed to partially resume minimal harvesting, as prescribed in the Forest Management Plan and its annual work plan.
“The state government overturned this in its cabinet meeting on May 5 this year, with a view to terminating the licence agreement,” said Sabah chief conservator Frederik Kugan in a statement yesterday.
“The Sabah Forestry Department issued a directive to cease the operations immediately on May 7, 2021.”
This affects a total of 47ha of industrial tree plantation compartment, an area that had been earmarked for forest plantation development.
The logging was done to cover the cost of road maintenance, monitoring and protection.
This is based on the company’s empowerment and entitlement to continue performing its obligations and duties as contained in the timber licence agreement, as well as Section 383 of the Companies Act 2016, said Kugan.
“This involves 1,860 logs, or 5308.99 cubic metres of varying log sizes.
“In pursuance to the state government’s decision to terminate the licence, the Sabah Forestry Department has been directed to conduct a full forest resources assessment to report to the state government for further action, including the possibility of a re-tendering process.”
The troubled SFI, in which the state government has a 2% stake, has been on receivership after its former owner, the Indian-based Ballapur Industries, sold the firm to Pelangi Prestasi Sdn Bhd, a company linked to tycoon Tan Sri Syed Mokhtar Albukhary, in April 2018.
The Vibes on April 18 highlighted the non-payment of salaries of 2,000 SFI staff since February, and Sabah Chief Minister Datuk Seri Hajiji Mohd Noor has promised to resolved the matter. – The Vibes, May 14, 2021
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