Masidi Refutes Shafie Over RM1Bil Bond Repayment

13 August 2025

KOTA KINABALU: State Finance Minister Datuk Seri Masidi Manjun has refuted Warisan president Datuk Seri Shafie Apdal’s remarks on the 2019 repayment of a RM1 billion federal bond, saying they gave the misleading impression that the debt was settled within a single year.

He said Shafie’s claim that the state government had to “find” RM600 million within months in 2019 was inaccurate, as the repayment schedule had been determined since 2014, with funds allocated under the state’s financial plan.

“When the RM1 billion State Government of Sabah Bonds (2014/2019) was issued in December 2014, Bank Negara Malaysia required the establishment of a dedicated Sinking Fund to ensure full repayment upon maturity,” Masidi said in a statement today.

The safeguard, he explained, meant RM200 million was set aside annually over five years to prevent a financial burden on the state, regardless of which government was in power.

Shafie, who was chief minister from 2018 to 2020, alleged that when Warisan took office in 2018, the Sinking Fund, which was created to ensure full repayment at maturity, contained only RM400 million, well short of the RM1 billion needed to repay the principal to Putrajaya.

However, Masidi said records staged contributions of RM2 million in 2016, RM200 million in 2017, RM400 million in 2018, and RM380 million in 2019, with the remaining RM18 million covered by interest from investments, taking the total to RM1 billion.

“In fact, during Warisan’s administration, only one payment of RM380 million was tabled, an obligation that would have been carried out by any government in office,” he added.

He also dismissed Shafie’s allegation that RM500 million of the bond was spent in another state, calling it unfounded and irresponsible.

“Such a serious claim, made without a shred of credible evidence, misleads the public and undermines trust in the state’s financial management,” he said.

According to Masidi, RM544 million was used to repay an earlier state bond issued in 2009, while RM456 million funded state development projects under the approved 2014 budget.

“Repaying the bond on schedule was a legal and contractual obligation, not an act of goodwill.

“Public discussion on state finances must be anchored in documented facts, not selective figures or politically convenient narratives. The people of Sabah deserve nothing less,” he said.