Part 8: RM8 Billion Diverted — How SDB’s Loans Enriched Peninsular Developers While Sabahans Paid the Price
📌 Introduction
Between 2003 and 2018, Sabah Development Bank (SDB) approved approximately RM8 billion in loans to companies based in Peninsular Malaysia. Around 95% of these loans were for property development projects in Kuala Lumpur, Selangor, and Johor—far removed from Sabah’s primary development needs. LINK - Daily Express
By mid‑2024, 75% of SDB’s total loan portfolio had collapsed into non‑performing loans (NPLs), with the bulk linked to these Peninsular firms. The result: Sabahans were left RM5 billion poorer, while the bank’s statutory purpose—to finance Sabah’s growth—was undermined.
⚖️ Legal Contradiction: 60 Years vs 12 Years
Sabahans face a 60‑year liability under the Land Ordinance, while Peninsular borrowers enjoy a 12‑year limit under the Limitation Act.
“If SDB’s RM8 billion in loans were secured against Peninsular land, then many of those debts are already time‑barred. The result: Sabahans remain shackled to debts for generations, while Peninsular developers walked away from billions in non‑performing loans. This is not just mismanagement—it is systemic inequity.”
📉 Policy Shift
The current Sabah government has since adopted a “Sabah First” policy, refusing loan applications from Peninsular companies and focusing solely on projects within Sabah that provide direct local impact. While this reform is welcome, it raises a deeper question:
Why did it take RM5 billion in losses before corrective action was taken?
And will accountability follow, or will this remain another cosmetic change?
🎯 Closing Hook
The diversion of RM8 billion in loans is not just a financial scandal—it is a mirror of the same systemic avoidance and inequity that has plagued Sabah in education, housing, and governance.
Part 9 will ask: What remedies are possible when laws themselves entrench inequity? And how can Sabahans demand proportionate justice when the system is designed to let others walk away?
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