Sabah Finance Minister refutes Shafie’s RM1bil debt repayment claim

CLAIMS by Datuk Seri Shafie Apdal that the Warisan-led Sabah government in 2019 paid off RM1 billion in state debt are misleading, according to Sabah Finance Minister Datuk Seri Masidi Manjun.

Masidi clarified on Saturday (10 August) that the debt in question — the State Government of Sabah Bonds (2014/2019) — was issued during the Barisan Nasional administration in December 2014.

As a condition of the bond issuance, Bank Negara Malaysia required the Sabah government to establish a sinking fund, known as *Kumpulan Wang Amanah Bagi Bayaran Balik Bon*, to ensure full repayment of the bond when it matured in 2019.

“This was a safeguard to prevent the repayment from becoming a heavy financial burden on the state’s finances,” Masidi said in a statement.

He explained that RM200 million was deposited into the sinking fund each year over five years, which meant that by the time Warisan assumed office in 2018, the bulk of the repayment was already secured.

“In 2019, the sinking fund stood at RM1 billion, enabling the state government to make a one-off bullet payment to settle the bond in full,” he said.

Masidi stated that it was therefore inaccurate to suggest that the repayment was the result of any special initiative by the then Warisan-led government.

“Rather, it was due to prudent financial planning put in place by the previous administration,” he added. - August 10, 2025