Unprofitable Sedco Group units set for management buyout, closure

KOTA KINABALU (Jan 21): Sabah Economic Development Corporation (Sedco) Group subsidiaries that fail to achieve profitability within a year will face a management buyout process or be shut down.

Sedco chairman Datuk Masiung Banah said continuing to defend loss-making companies that burden the parent agency “is like scoring an own goal”.

“We want to see their performance—whether targets are achieved or not. If they are not achieved, why?

“If they are achieved, we need to improve further,” he told the media after addressing the Sedco Group here.

The Kuamut assemblyman said significant reforms to the governance of subsidiaries that are less competitive in their respective industries must be implemented.

He explained that companies failing to meet their key performance indicator (KPI) targets must submit an action plan to improve performance and current financial position.

Masiung said he is currently in the process of evaluating the chief executive officers (CEOs) of corporate companies under the Sedco Group, together with Sedco’s top management, in terms of operational effectiveness.

“Although so far there have been no serious reports of corporate misconduct within the structures involving subsidiaries, their operations must be monitored every three months.

“I do not merely give instructions; I will also go down to the ground from time to time to monitor the operations of these subsidiaries,” he added.

Masiung said there are 23 subsidiaries operating across various industries under the Sedco Group.

He added the companies that will be the focus in generating the state’s economic chain this year are Sedco Mining Sdn Bhd, Kudat Blue Economy Park project, and Borneo Cement (Sabah) Sdn Bhd.