Let us boil down this stark litany of admissions recently made by the new bosses of the so-called Sabah Development Bank (due to be re-named Sabah Robber Bank?) who have told the State Assembly that they called in Malaysia’s Anti-Corruption Commission to investigate the government controlled entity in April.

The bank is a wholly-owned subsidiary of the Sabah State Government, which its website still claims “functions as a healthy development financial institution“.

Yet, the evidence presented to state representatives indicates the exact opposite of that claim. We have learned that during the period from 2013, when the SDB was set up by then chief minister cum finance minister Musa Aman, until he was turfed from office in 2018, a staggering RM5 billion was invested in dud ‘Non-performing’ loans.

This money is effectively therefore missing.  The bank’s new managers told their audience three weeks ago, that as well as making their criminal report to the MACC “as of the end of June, legal action has been initiated on all 43 of those NPLs [non-performing loans].”

The statement by the new board, as reported by the press, very specifically ties the period of bad loans to Musa Aman’s period in office. The message being that the present management of the bank is a reformed and unblemished affair – the people of Sabah must certainly hope so.

The purpose of the bank, which as Finance Minister Musa set up and oversaw, is to exercise a “mandate from the state government to pursue economically and socially meaningful, and environmentally responsible development projects in Sabah” the new board acknowledged.

However, between 2003-2018 the bank instead invested RM8 billion into projects of which a staggering 95% had nothing to do with Sabah, but rather comprised “property investments in Kuala Lumpur, Selangor and Johor”!

When these ‘investments’ failed to deliver back on their loan requirements, the testimony continues, the previous managers of the bank resorted to ‘creative accounting‘ reissuing further loans to the defaulting parties to enable them to give the appearance of having met their obligations.

By this means, as anyone can work out, the bad debt was allowed to spiral higher and higher – no wonder the MACC has been brought in to investigate who was behind such criminal negligence, or worse, and why?

All this was apparently presided over by Musa Aman as the political boss of the state-owned venture. Was he not concerned, at the very least, that none of the projects being funded by the state with the vaunted purpose of developing the state were actually located in the state?

Had he not noticed the plummeting losses, the non-performing loans or the shocking bottom line – after all the bank only had a capital base of RM560million yet had lent out over ten times that amount on dodgy projects –  or had the books been cooked to kid him too?

We know, of course, that Musa has had his own personal brushes with the law from time to time.

Most dramatically, having fled the country after losing the election together with his federal ally Najib in 2018, he was eventually arrested and brought to book over 46 graft and money laundering charges related to massive timber corruption (originally exposed in a major series of articles by this very website).

One of the first things the subsequent coup coalition government did after grasping back power in 2020 was to drop those charges. Musa’s old ally Najib, a key political force behind that decision, has not been so lucky himself, as we all know.

The ex-federal PM cum Finance Minister has been jailed over the first set of charges relating to his own massive 1MDB development scandal (also revealed by this website) and several further charges are continuing through the courts.

Indeed, it is hard not to see more parallels than differences between Sabah’s dodgy development bank and Najib’s own humungous 1MDB scandal in terms of both scale and structure.

In each case vast sums of money were raised in loans from the bond market by these public funds to invest in murky enterprises – not within the alleged target area for development but far away – with those projects then going up in smoke to provide no returns, let alone development.

(No less than 75% of the loans made by the SDB during this period are now categorised as non-performing).

Moreover, both these agencies were politically driven by finance ministers (one state one federal) who equally appear to have been strangely prone to being taken for a ride (or so Najib would have it).

Musa has yet to be taken to task over this particular 1MDB-scale scandal in Sabah. To the contrary, not only were all the other unrelated charges against him inexplicably dropped but he is in the process of a major rehabilitation.

The coup government’s political allies from GRS, remain in office, under the current chief minister Hajiji Noor, and the party has re-invited the wealthy Musa back into the fold. He has already been touted as a prospect for a return to office.

Look at him placed in the seat of honour, next to his successor, at the official Adfiltri celebrations just before the restoration of the PH government:

The outcome of this new investigation announced into the vast losses made by the Sabah Development Bank owing to dud loans and creative accounting under his watch might, therefore, prove every bit as interesting as the unravelling of 1MDB itself!

Nonetheless, within hours of the embarrassing report to the State Assembly, the Sabah Finance Ministry began to play down the seriousness of what had been revealed.

Not to worry, explained Sabah Finance Minister Datuk Seri Masidi Manjun, because the bank’s RM5 billion bad loans, or non-performing loans can allegedly all be recovered by selling of the assets allegedly purchased with the money.

Yet again, the parallels with 1MDB asset seizures and desperate firesafes to recover losses could not be more marked and no one should attempt to bury this under-reported scandal.