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Hajiji will revamp Sabah’s GLCs. Hajiji has announced his first major act for his 2nd term as CM on 6 December 2025. His success in transforming the GLCs to the right path is the best 2026 NewYear present for Sabahans. 

Hajiji’s taking on his first challenge in his 2nd term is like him taking back rights in oil and gas and signing of CCA with Petronas in his first term as CM. Though vastly different in essence, both are intensely complex politically and economically with incredible financial implications for Sabah. Both are extremely important to Sabah’s long term economic growth. 

Hajiji succeeded to regain Sabah’s rights in oil and gas and CCA is miraculous as previous Sabah governments have failed to do so in 40 years plus. Thanks to Hajiji, Sabah now has a vibrant oil and gas industry and billions of investments. Thousands of young Sabahans have found meaningful employment. Many Sabahan businessmen have secured business opportunities for the first time in Sabah’s history. Previously the door to oil and gas was tightly closed.

For those who want to some insights into the complexities of Sabah’s GLC problems, please view YouTube by Roger Chin and me: 

https://www.youtube.com/watch?v=qs2LTSK5Kiw

Hajiji has set up key objectives for the revamp of GLCs.

Hajiji has set out 4 main directions:

[1] Improve governance and performance.

[2] Revamp the appointments of chairpersons, directors so that there will be better accountability.

[3] New leadership in GLCs can support SMJ and to boost economic value for Sabah.

[4] Professionalism and best practices will be the guiding light for all GLCs.

Central and most critical for success of GLC Revamp depends on a comprehensive matrix authority.

Before it was free for all for some GLCs until Hajiji and Masidi put a stop to it.

Without a well-designed Matrix of Authority, it is impossible to control and monitor Sabah’s more than 250 GLCs.

The Matrix of Authority is a crucial, foundational tool for the revamp of GLCs in Sabah because its implementation directly addresses the core issues of weak corporate governance, lack of accountability, and inefficiency that the revamp aims to solve.

Here is a breakdown of why it is so important:

[1] Strengthening Corporate Governance and Accountability

The primary goal of the Sabah GLC revamp should be to strengthen corporate governance. The Matrix of Authority achieves this by:

[i] Defining Clear Roles: 

It formally documents and separates the powers, duties, and responsibilities of the three key decision-making bodies: the State Government (as the shareholder, elected representatives of Sabahans), the Chairmen + Board of Directors, and Senior Management/CEO.

[ii] Preventing Overreach: 

By clearly stating what each party can and cannot do, the Matrix of Authority prevents unwarranted political interference by the government in day-to-day operations and stops management from making high-risk decisions without proper Board oversight. Where and when required, reference to and approval from the government, as the shareholder, for all important decisions.

[2] Establishing Decision Limits: 

[i] It specifies the approval thresholds for various transactions, such as capital expenditure, joint ventures [JVs], loans, and hiring/remuneration of key staff. For example, any expenditure over a certain amount [to be established] might require Board approval, while anything over a higher amount [to be established] might require State Government [shareholder] approval.

[3] Enhancing Efficiency and Professionalism

[i] A well-defined Matrix of Authority ensures that decisions are made at the appropriate level, streamlining operations:

[ii] Faster, Decentralized Decisions: 

Day-to-day operational decisions are delegated to the professional management team, allowing them to act quickly and efficiently without having to seek approval from the Board or government for every minor issue.

[iii] Focus on Strategy: 

It allows the Board to focus on its fiduciary duties: strategy, oversight, risk management, and performance monitoring, rather than getting bogged down in administrative tasks.

[4] Professional Leadership: 

[i] It reinforces the push for dynamic, professional, and results-driven leadership by empowering the CEO and senior management to execute the strategy, while being held strictly accountable by the Board.

[5] Mitigating Risk and Corruption:

[i] Historically, weaknesses in GLCs can be tied to a lack of clear checks and balances. The Matrix of Authority serves as a critical control mechanism:

[6] Checks and Balances: 

[i] It ensures that no single individual or small group (be it a political appointee or a senior manager) has unfettered control over the company’s finances and strategic direction.

[ii] Transparency: It provides a transparent framework for internal and external auditors to evaluate whether the proper approval procedures were followed for significant transactions, thereby reducing the opportunities for mismanagement or corruption.

In essence, the Matrix of Authority is the blueprint for structured decision-making that replaces ad-hoc or politically motivated decision-making, which is critical for transforming Sabah’s GLCs into “effective and trustworthy economic engines” aligned with the Sabah Maju Jaya (SMJ) goals.

How complex, how enormous is Sabah’s GLC problems? How much have been the losses to the Government in all these years?

The GLCs have been a huge economic problem, dragging down Sabah’s economy for years. 

It must be recognized that the GLCs are some of the many legacy problems that have been accumulated over the past 40 years. Hajiji and Masidi should be congratulated for taking some preliminary action to put right on some GLCs in 2024/2025. Now, with a strong mandate, they go for the full swing. 

[1] Had these GLCs belonged to a private company, it would have gone bankrupt long time ago. Or more likely, the chairmen, directors would have been reported to the police or MACC for all sorts of malpractices, CBT, and/or criminal negligence. 

[2] Dozens of lopsided JV agreements [highly unfavourable for Sabah] have been signed. Many GLCs are locked in legal fights for years. More on the way.

[3] Staggering losses including financial losses and opportunity cost, have piled up.

[4] Prime lands worth billions have given the Government nominal returns. GLCs pay nominal premium of RM1,000 for each these valuable lands. 

[5] Most of the failed JV projects in KK belong to GLCs.

[6] Tax liabilities.

[7] GLCs have been given monopoly rights which in many cases, have been misused.

In summary, the GLCs are a very big part of the Sabah government and economy. Therefore, Sabah’s poor economy, to a large extend, is reflective on the GLCs poor performance. 

Hajji’s GLC revamp is a massive complex undertaking.

Taking into consideration of the number of GLCs, their diverse activities, huge legal and financial complications and quality of chairmen and directors, management, the revamp will be massive. It will take tons of political will and courage to succeed.

The revamp of Sabah’s GLCs should be based on a comprehensive set of criteria that balances commercial performance with strategic state development objectives.

Given the history of underperformance and governance issues in many Sabah GLCs, the focus should be on achieving financial sustainability, governance excellence, and alignment with the Sabah Maju Jaya (SMJ) 2.0 economic plan.

Here are some ideas which I hope can help with the revamp.

[1] Enhancing the monitoring system.

Hajiji and Masidi have introduced several control measures to rein in the GLCs, including a monitoring system. Broadening this monitoring system complemented by private sector expertise will enhance its effectiveness.

The Matrix of Authority will be a great help. 

[2] Financial and Operational Performance.

This is an important criterion, turning GLCs into profit-generating entities that contribute to the state’s coffers, rather than being a fiscal burden. Already some GLCs are delivering some results, for example: SMJ Energy, SOGDC, KKIP, Sabah Energy, Sabah Credit, Suria Capital. Being turned around are SDB and SEDCO group of companies.

[3] Financial Sustainability [Profitability:

[i] Key Performance Indicators [KPIs]: 

Achieve positive Return on Assets [ROA], Return on Equity [ROE], and Earnings Per Share [EPS], and consistently pay dividends to the state government.

[ii] Viability Assessment: 

Implement a zero-tolerance policy for GLCs that are perennial loss-makers and require frequent government bailouts.

[4] Operational Efficiency:

[i] Evaluate the operational efficiency and business models of each GLC.

[ii] Cost Management: 

Ensure effective cost control and optimal utilization of assets (labour and capital) compared to industry benchmarks.

[iii] Relevance Check: 

Determine if the GLC’s current business model remains relevant to the state’s economic structure. Underperforming or outdated entities should be restructured, merged, or wound down/privatized.

[5] Corporate Governance and Accountability.

In the context of Sabah’s GLCs, this is the most critical area for reform, aimed at ensuring transparency and removing political interference. The establishment and strengthening of the dedicated GLC Monitoring Committee are a key step here.

[i] Transparency and Oversight:

Stricter Board Appointments: 

Implement criteria to ensure only qualified, professional, and independent individuals are appointed as Chairmen, Directors, and senior management, separating business decisions from political interests. Qualified and suitable politicians can be appointed if they meet the credibility standards.

[ii] Mandatory Vetting: 

Require all major contracts, especially Joint Venture (JV) agreements, to undergo mandatory vetting by the State Attorney-General’s Office and the Ministry of Finance before Cabinet approval to safeguard public interest.

Sabah’s AG Brenndon Soh is doing a great job here! No more lopsided a JVs!

[iii] Integrity and Anti-Corruption:

Establish clear codes of conduct and mechanisms for reporting and investigating financial leakages and corruption, promoting a culture of integrity and accountability.

[iv] Reporting Standards: 

Implement enhanced financial monitoring and reporting standards to track performance consistently and transparently.

[6] Strategic Alignment and Economic Impact.

Many Sabah’s GLCs can be transformed into effective engines of growth that drive the state’s economic agenda, specifically the Sabah Maju Jaya (SMJ) 2.0 development goals.

Which GLC system should Sabah look at?

Not the GLC system in the federal government. No doubt it has some performing GLCs and agencies. By and large, these federal GLCs are grossly underperforming. Many are in dire straits. Unimaginable sums of money have disappeared. Some Federal GLCs have worse management than ours.

For a really good GLC system, especially in view that Hajiji and Masidi have announced the formation of a sovereign fund for Sabah, Singapore’s Tamasek is the best model to look into. Tamasek owns/controls some of Singapore’s world famous companies like DBS [biggest bank in S.E. Asia and best performing bank in Singapore], SIA [top airline in the world], Capital Land [leading in property development], Keppel and Sembawang [in marine, oil and gas], Singtel [telecommunication], SPA International owns ports world-wide, SMRT [mass transit], ST Engineering. Temasek’s profit before tax in 2024 was S$10.9 billion [more than RM35 billion]

What is the key success of Tamasek?

Simple: Choose the best brains [including highly credible politicians], credibility, clear policies, zero tolerance on corruption, direction from and tight supervision by the government. Pay well. No politics, strictly business and professionalism.

Are there Sabahans who can do the job? Yes. Where there isn’t any, employ experts from outside, including foreigners. The last CEO of DBS was a non-Singaporean.

Sabahans should wish Hajiji and Masidi success in this very difficult turn around. 

Supporting Hajiji and Masidi in their endeavour to revamp the GLCs is ensuring a brighter future for ourselves..

No doubt, it is going to be a tough, sorting out problems that have been entrenched for more than 40 years.

Their success will mean a lot for present and future generations. Their success will bring many benefits:

[1] The Sabah Government will not have to dish out funds to support perennial failed GLCs. The savings can be used to look after Sabah’s B40, scholarship etc.

[2] Profits from performing GLCs will enlarge Sabah’s budget and state reserves.

[3] GLCs can contribute to the proposed Sabah Sovereign Funds which will benefit all Sabahans for generations to come.

[4] Performing GLCs will generate rewarding jobs with good pay for Sabahans, especially young Sabahans. They will attract returnee talents.

[5] Well managed GLCs will expand their business and thereby enlarge Sabah’s economy.

[6] Performing GLCs can JV with Sabahan businessmen on property development and other development projects like new townships This will expand Sabah’s economy. The benefits will stay in Sabah.

The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: Forum@dailyexpress.com.my