How Hajiji fixed Sabah’s GLC problem

 One important decision was recognising the problem in the context of economics and management and not an issue to be exploited for political gain.

From John Lo

The GLC problem in Sabah is not new. In fact, it is a problem that has been decades in the making, and past leaders of major parties at the state and federal level cannot plead ignorance.

The blame game is unproductive and irresponsible, as well as it is done at the expense of Sabahans. The most important thing for any responsible leader to do is to provide a solution to this  problem.

Having said this, the GLC problem is an economic-management issue that needs such solutions.

Those who dare

The most important decision by Hajiji was to recognise the GLC problem in the context of economics and management, not an issue to be exploited for political gain.

Before Hajiji, various ministries were in charge of some GLCs. There was no focus and no direction. Often, it was a case of the right hand not knowing what the left hand was doing. In the worst scenario, GLCs were all over the place and doing so in silo, and more than often unanswerable to anyone.

The best thing that Hajiji has done was to entrust Masidi to take charge of the GLCs. This put a stop to the days of “free for all”, which has never been done before.

Can the GLCs be turned around? The simple answer is yes. Hajiji and Masidi have shown that this can be done, with strong political will and recognition that it is an economic-management issue.

Here are some of their success stories.

1. Innoprise Plantation Berhad’s Jasnih Daya has rubbished the common wisdom that politicians are not suitable to helm GLCs. In line with Hajiji’s philosophy, the assemblyman has clearly separated business from politics. Under him, Innoprise has turned around many of its businesses and are profitable.

2. SMJ Energy is the “darling” of the GLCs, it showcases what should, must and can be done. The three-year-old company is extremely profitable and raked in RM250 million in 2024, paying the largest dividend to the Sabah government. In terms of real benefits for Sabah, most importantly, SMJ Energy is spearheading the implementation of the commercial collaborative agreement between the Sabah government and national oil company Petronas. The CCA is a major victory by Hajiji in regaining Sabah’s rights in the oil and gas sector.

SMJ Energy is facilitating the participation of Sabahan private sector companies and the creation of thousands of jobs for Sabahans in oil and gas. Both are doing excellently well with record numbers of Sabahan companies and Sabahans actively in this industry.

Though a politician, Masidi as the chairman has guided SMJ Energy as a model for all GLCs. No political interference, strictly professional. The board members are people of integrity, well respected professionally. SMJ Energy is a model of being able, as a GLC, to monetise the assets and opportunities from the state government.

Sabah Energy Corporation will probably become the largest gas aggregator in Malaysia and the state’s gas resource is in good hands for the industrialisation of Sabah.

3. Sabah Oil & Gas Development Corporation Sdn Bhd (SOGDC) has turned the Sipitang Oil & Gas Industrial Park (SOGIP) around and is now fully taken up. Its joint venture with Gibson Shipbrokers Ltd will transform SOGIP into an oil and gas logistics hub. It will build another industrial park dedicated for oil and gas development. When this is completed, Sabah will become an oil and gas hub in our own rights.

4. The combination of former Sabah chief minister Yong Teck Lee and Fredian Gan as chairman and CEO of POIC Lahad Datu, respectively, has turned the company around. POIC LD will now expand its business. It leads the way in meticulous planning for this expansion, having obtained a Free Zone approval from the federal finance ministry.

Once implemented, POIC LD, will become a regional marine hub that can spur massive economic growth beyond Lahad Datu and East Coast, to the whole of Sabah.

5. Sabah Credit Corporation, under the chairmanship of former MP Yee Moh Chai and CEO George Taitim, has expanded its facilities to assist farmers, contractors, developers and women entrepreneurs. SCC will create a good impact where it is most needed in society.

6. It is worthy to note that Hajiji has appointed two young Sabahans – James Wong and Natasha Sim – to turn around the Sabah Economic Development Corporation (Sedco) and Sabah Mineral Management, respectively.

7. The biggest turnaround was accomplished by Sabah Development Bank Berhad. Hajiji and Masidi have entrusted this job to Lim Haw Kuang as the executive chairman. The latest rating of AA1 from RAM is the best testimony of a job well done by Lim and his team.

Hajiji’s GLC transformation strategy is spot on

Given the nature and the size of the GLC problems, Hajiji’s strategy is the best. Here are some pointers:

1. Hajiji did not succumb to the temptation of treating the non-performing GLCs as political problems. Had he done so, it would have damaged Sabah’s economy further. He saw, very correctly, since taking office, that these GLCs are economic and management problems that must be tackled in the appropriate manner. His was a silent revolution, no political fights, no finger pointing, just a lot of hard work.

2. Hajiji’s choice of Masidi to take charge of the finance ministry and all GLCs is the best. Masidi is sharp and able to grasp the enormity of the problems. The GLC Oversight Committee is where it should start.

3. Hajiji and Masidi have selected some of the most important and critical GLCs to focus on, GLCs that will create huge impacts for Sabah’s long-term benefits. Taking on all 250 would not work.

4. It is correct to appoint credible and appropriate people, including politicians to be chairmen and directors and CEOs or senior management.

5. The hallmarks of success for these GLCs: no political interference, no political self- interest, no personal interest. It is all about proper governance.

Now there are at least 10 successful, impactful GLCs, which can become the “templates” for other non-performing GLCs to emulate.

To ensure higher probability of and faster success, these GLCs can take on other GLCs as piggyback riders.

What Hajiji has started on the GLC transformation must continue after the 2025 election. - FMT

John Lo is an ex-banker and an FMT reader.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.