When Supervision Fails: The Case of SDBank and Sabah’s Governance
Sabahans are told that recent financial maneuvers are not “bailouts.” Yet when we examine the details — from the RM200 million conversion at SDBank to the RM8 billion diverted from development funds — the real issue is not labels. It is the failure of supervision that allowed institutions to deteriorate and debts to become questionable. The RM200 Million Conversion The State Government converted RM200 million in deposits into Redeemable Preference Shares (RPS) at SDBank. Critics called it a bailout. In reality, it was a risk management decision to strengthen the Bank’s capital base and avoid exposing the State to RM3 billion in liabilities. LINK