Billions of Development Allocations to Repay Debts of Sarawak Government’s Subsidiary Companies
The Sarawak Government has been using Billions of Development Fund to repay the debts of 5 of its subsidiary companies, namely Sarawak Capital AssetsSdnBhd, SSG Capital ResourcesSdnBhd, SGOS Capital HoldingsSdnBhd, EquisarSdnBhd and Sarawak Technology HoldingsSdn Bhd.
Since Year 2006, the Sarawak State Government has, on average, allocated more than RM1 billion of its Development Fund into an account called “Government Contribution Towards Approved Agencies” Trust Account, including a sum of RM1.418 billion in the 2016 Budget.
The State Government has been keeping very secretive on the operation of this Account and has evaded many questions asked by me since 2010 in respect of its operation.
It was not until 2013, after a reprimand by the Federal Auditors-General that the Sarawak State Government tabled in DUN Sarawak, the Financial Statements of this Account for the years 2006 – 2010.
However, those financial statements were all one-page statements where no information was revealed to whom the billions of Ringgit in the account was paid.
After several rounds of persistent questioning, finally, in the recent DUN meeting, the Government tabled the Financial Statement of the said Trust Account for the years 2011 till 2014. In those statements, its revealed that the billions of Ringgit in the said Account were all used to repay the loan taken up by the Sarawak State Government through the above-mentioned 5 of its subsidiary companies.
The financial statements of the “Government Contribution Towards Approved Agencies” Trust Account for the years 2011 till 2014, which were tabled in Sarawak Dun in the December,2016 meetings, reveal as follows:
1. For the past 10 years, the Sarawak State Government borrowed a total RM1.7 billion and US$ 3.373 billion.
2. From 2011 – 2014, the repayment of the loan by the Sarawak State Government are as follows:
Year - Amount of Loan Repayment (RM)
2011 - 1,603,684,801.03
(no information was given on the repayment of loan for the years prior to this)
Though it was stated in the Financial Statements that the loans were “Grants for Financing Various Projects”, there is totally no mention whatsoever on the details of the said financed “Projects”.
Normally, if projects were financed directly from the development allocations in the Budgets, the Government has to list out and be answerable in DUN on the details of the projects. However, under this mode of financing, ie. through a loan taken up by the State Government, the State Government is circumventing the requirement to be answerable to DUN on the details of the projects.
As such, information like, what are the “Projects” financed, how much is the costs of each “Project”, who are the contractors involved, whether there is any open tenders called for the award of the “Projects”, progress of the “Projects”, etc are all not available and not accountable to DUN.
Because the Projects are financed through loans of the Sarawak State Goernment’s subsidiary companies, technically, the State Government is not even accountable and answerable to the Sarawak DUN on the fundamental question whether the Projects actually exist.
For instance, the State Government through Sarawak Capital Assets SdnBhd, borrowed US$650 million, an equivalent of approximately RM2 billion. The DUN Sarawak was kept in the dark on what “Projects” were financed by this amount and to whom the amount was eventually paid. Is there any mis-appropriation of fund or corruption involved?
This mode of circumventing the scrutiny and accountability to the Sarawak DUN is similar to the modus operandi of the 1MDB scandal, except that in the case of 1MDB, the Federal Government transfers valuable land to 1MDB for the latter to sell and repay the latter’s debt but in the Sarawak State Government’s case, it is a direct allocation of Development Fund for these subsidiary companies to repay their loans.
On another note, when the State Government borrowed these loans, the then prevailing exchange rates are in the region of US$1 to RM3.2 – 3.5. Now the exchange rates is US$1 to RM4.2. For the US$3.3 billion loan, the State Government’s obligation to repay has increased by approximately 30%. The RM10 billion debt is now approximately RM13 billion debt and every single Ringgit will have to be borne by us Sarawakian.
Despite the Government’s attempted cover-up on the usage of this astronomical fund, I will continue to pursue on this question and make the Sarawak State Government answerable to the people and provide us the answers.
The only way by which the State Government can stop me from asking the questions in DUN is to stop me from getting re-elected as an ADUN.
Chong Chieng Jen
MP for Bandar Kuching
ADUN for Kota Sentosa