Kota Kinabalu: The Sabah Government has defended its transparent approach to financial management, including converting part of its fixed deposits into investment instruments to generate better returns for the State, Finance Minister Datuk Seri Masidi Manjun said.
Winding up the debate on the Supplementary Supply Bill 2026 at the State Legislative Assembly on Tuesday, he said the RM200 million allocation for Sabah Development Bank Berhad (SDBank) involved an accounting adjustment to convert existing fixed deposits into Redeemable Preference Shares (RPS), and not a fresh capital injection or cash outflow.
Masidi said the conversion would increase returns from 2.95 per cent interest on fixed deposits to dividend returns of 3.15 per cent per annum, subject to the terms of issuance and the bank's financial performance, while RM10 million was allocated to POIC Sabah Sdn Bhd to support its operations and investment efforts.
He said all investment proposals involving State public agencies undergo evaluation by the State Agencies' Loan and Investment Committee before being submitted to the State Cabinet, adding that it was inaccurate to describe the allocations as bailouts for underperforming Government-linked companies.
Masidi also said the Government had formed a committee chaired by the State Secretary to review feedback on the Budi Madani diesel subsidy mechanism in Sabah, while the State Legislative Assembly was informed that detailed financial performance data of recipient companies would be provided in writing.
