KOTA KINABALU – A newly formed state consortium to woo investments to shore up Sipitang’s timber industries may not include plans to revive Sabah Forest Industries (SFI), which was placed under receivership last year.
Sabah timber union leader and ex-SFI worker Martin Andong said all signs show that the government is not doing anything to rescue the already bankrupt state pulp and paper company.
SFI was issued a winding up order in November last year, and the firm still owes hundreds of workers several months of wages.
Although the workers had called for the government to salvage the firm, Andong said that much of its assets and unpaid wages are now in the hands of the state’s Insolvency Department.
At this point, our wage problems are being referred to the department. It has now fallen under the purview of the Insolvency Department,” he told The Vibes.
“The workers had been told to file proof of debts, and at this point, I don’t see this as an effort to revive SFI.
“It is as if the state is not going to rescue SFI and solve the workers’ welfare concerns,” Andong told The Vibes.
It is understood that SFI’s assets are also being put on sale to repay its debts, amounting to around RM2.7 million.
Andong said none of this would have happened if the state government had stepped in much earlier.
Sabah Chief Minister Datuk Seri Hajiji Mohd Noor had said in the state assembly last week that aside from spearheading efforts to woo investors, the consortium is also tasked to resolve welfare issues faced by the SFI workers.
Established in 1982, SFI was once a successful paper mill company owned by the state, managing a 721,000-acre forest estate, before it was sold to privately owned companies, at least twice.
Eventually, it went under receivership of Grant Thornton Consulting Sdn Bhd in 2017 after running into debts.
It was acquired by Pelangi Prestasi for RM1.2 billion. However, SFI’s timber licence was frozen after a change of power in the state, in the wake of the general election in May 2018.
A legal tussle ensued between Pelangi Prestasi and the then Warisan-led Sabah government.
On May 12 last year, the state ordered the termination of SFI’s logging contract, and on September 1, its licence was terminated.
Hajiji, meanwhile, said that the consortium is made up of three entities: Yayasan Sabah and two private companies that have yet to be named.
The consortium, he noted, will handle forestry in areas formerly under SFI’s ambit, and is expected to rehire all the SFI workers.
“In the proposal paper given to the Sabah government, if the project does well, around 15,000 to 20,000 jobs could be created,” he said. – The Vibes, March 29, 2022
