KOTA KINABALU, Nov 15 — Government subsidiary Sabah Forest Industries (SFI) was today ordered by the High Court to wind up its business after failing to pay its debts.
Judicial Commissioner Leonard Shim issued the wind-up order after SFI failed to pay some RM2.7 million owed to its contractor Lee Khoon Hoo and others.
“The judge said that SFI has been given many chances to settle but have failed to pay the amount regardless despite the ample time given by the court,” lawyer for creditors Sabah Development Bank Berhad Datuk Fuad Ahmad told reporters today outside the courtroom.
“As SFI was unable to pay its debts as they fell due and is hopelessly insolvent, the court was correct to grant the winding-up petition. SFI will now go to liquidation,” he said.
Shim’s judgment came with provisions under Section 465(1)(e) of the Companies Act 2016. He ordered that the receiver be appointed as the Liquidator and ordered costs of RM5,000.00 be paid.
SFI was represented by lawyer Sukumaran Vanugopal.
The pulp and paper mill, set up in 1982, was one of Malaysia’s largest timber growers and wood processors, reportedly managing a forest estate of some 288,000 hectares, pulp and paper manufacturing facilities, and an integrated timber complex consisting of a saw mill and a veneer and plywood factory, supporting the local community in the Sipitang district.
It has been inundated with financial troubles in the last decade, having been sold over the years to different private companies who held the major shares and has been under receivership since 2017.
Businessman Tan Sri Mokhtar Albukhary’s Pelangi Prestasi won a bid to take over SFI in March 2018 and acquire all of SFI’s assets for RM1.2 billion but since then has also been caught up with troubles after former state government Parti Warisan Sabah issued fresh terms and conditions on timber licences on the company in June 2019.
It has reportedly also not paid salaries to staff for at least four months at the start of this year.
