KOTA KINABALU, July 21 — Sabah has defended its RM210 million allocation for state-linked companies, rejecting claims that the government was giving “bailouts” but instead said they were strategic investments that had undergone financial evaluation and risk assessment.

State Finance Minister Datuk Seri Masidi Manjun said the allocation under the Supplementary Supply Bill 2026 involved RM200 million for Sabah Development Bank Berhad (SDBank) and RM10 million for POIC Sabah Sdn Bhd.

Masidi who is also deputy chief minister II said the RM200 million allocation for SDBank did not involve any new cash injection from the state government, but was instead a phased accounting adjustment to convert existing fixed deposits held by the government into redeemable preference shares (RPS).

“The government’s asset holding will be changed from fixed deposits to RPS without any new cash outflow,” he said during his winding-up speech on the Supplementary Supply Bill 2026 at the Sabah Legislative Assembly today.

He said the conversion was part of SDBank’s transformation plan to strengthen its capital position.

The minister said the fixed deposits previously earned interest at 2.95 per cent for nine months, while the RPS could potentially provide returns of 3.15 per cent annually, subject to the terms of issuance and SDBank’s financial performance.

The RM10 million allocation for POIC Sabah, meanwhile, would support the company’s management costs and continued operations as the developer of the integrated industrial park in Lahad Datu, he said.

Responding to concerns raised by several assemblymen over the basis for approving such investments, he said all proposals involving state agencies and government-linked companies must go through the State Agencies’ Loan and Investment Committee (SALIC).

The committee evaluates proposals based on investment needs, project viability, financial projections, risks, due diligence, governance and alignment with Sabah’s strategic interests before recommendations are submitted to the state Cabinet.

The minister rejected suggestions that the allocations represented a bailout for underperforming companies.

“It is inaccurate to regard these allocations as a bailout. Each allocation has a specific objective and is supported by comprehensive evaluation before approval,” he said.

He added that the government had set a target for GLCs with state equity holdings to pay dividends of at least 10 per cent of their profit after tax, subject to financial position, operational requirements and development plans.