WARISAN president Datuk Seri Mohd Shafie Apdal has denied involvement in any alleged RM178 million loan write-off to a politically linked company during his time as Sabah Chief Minister - calling the claims a politically timed smear campaign to discredit him ahead of the state polls.
The allegations that were published by smear website SabahKini2 — claimed that Sabah Development Bank (SDB) under Shafie’s watch approved loans to Cash Bhd, a company said to be tied to a well-known Sabah businessman.
The site alleged that the loans, once classified as non-performing, were later reclassified as performing through a practice known as evergreening and tied the reclassification directly to Shafie who as chief minister also held the position as chairman to the bank.
Shafie, in a statement dismissed the claims as “malicious lies” intended to mislead the public and destroy his credibility.
“I categorically deny the malicious and baseless allegations that have been circulated by an online portal linking me to the supposed write-off of non-performing loans during my tenure,” he said.
He added that no non-performing loans were written off while he chaired the board of SDB and that all financial decisions followed internal credit protocols.
“As Chief Minister, I was not involved in day-to-day banking decisions or specific loan arrangements. Public institutions must be governed by professional processes, not political interference.”
No evidence presented
Responding to insinuations that he shielded politically connected borrowers, Shafie said, “At no point did I interfere in loan approvals or financial decisions at SDB.”
His denial follows disclosures in the State Assembly, where State Finance Minister Datuk Seri Masidi Manjun said SDB had been severely affected by evergreening — a practice where new loans were issued to repay overdue ones to avoid classifying them as non-performing.
This practice, Masidi said, masked years of deteriorating loan quality and led to the ballooning of bad debts that now make up three-quarters of the bank’s RM6.6 billion loan book.
The 2023 audit revealed SDB’s true financial condition, including RM 878 million in pre-tax losses and widespread asset overvaluation, much of it stemming from years of unchecked credit practices.
However, no specific evidence has been presented to show that Shafie personally ordered or approved such practices, and the largest concentration of risky loans appears to predate his administration.
Shafie questioned the timing and motivation behind the renewed allegations.
“If wrongdoing really occurred, why has the GRS government failed to act despite being in power for almost five years? Why was there no forensic audit in 2021? Why wasn’t a report made to the MACC back then?”
He said the sudden reappearance of the Cash Bhd narrative through anonymous online platforms was politically convenient and part of a calculated effort to create a villain.
Shafie ready to face investigation
“This is not about justice—it’s about politics. This is a deliberate political smear that has been precisely timed because the current government is struggling,” he said.
Shafie said those who had once profited from politically connected loans were now manipulating the truth to avoid scrutiny.
“Those who once treated public banks as their personal ATMs are now twisting the truth to protect their own pockets.”
He warned that he would not remain silent while what he described as fabricated narratives continued to circulate online, and said he was prepared to initiate legal action.
“I will not hesitate to take legal action to defend my name and integrity against those who continue to publish and propagate these lies.”
Shafie also reiterated his readiness to face any impartial investigation, stating he had nothing to hide.
“The people of Sabah are tired of watching another wayang kulit. They want the truth — and honest leadership that puts the people first,” he said. - June 19, 2025
