Sabah CM threatens chronically underperforming GLCs with closure

Sabah’s Chief Minister Datuk Seri Hajiji Noor has issued a stern warning to underperforming government-linked companies (GLCs) in the state. Starting next year, these firms will face stricter financial demands, including higher annual contributions and mandatory dividend payments.

Hajiji Noor announced that profitable GLCs must now pay a minimum dividend of 10% of their after-tax profits. Annual contributions to the state will also rise, ranging from RM2 million to RM10 million per company. This year, total dividends and contributions from GLCs reached RM131.6 million.

The Chief Minister has placed poorly performing GLCs on final notice, warning that those failing to turn a profit for five consecutive years could be shut down. Leadership changes are also on the table, with chairmen, board members, and executives facing replacement if they miss key performance targets. To improve oversight, CEOs and general managers must now submit quarterly performance reports directly to Hajiji. The state government’s goal is to transform GLCs into efficient economic drivers, lifting their current 'medium-level' performance. These reforms aim to unlock greater potential from government-owned agencies and push Sabah toward a new phase of growth. Hajiji emphasised that the measures are part of a broader strategy to ensure accountability and financial sustainability across all state-linked entities.

The new rules will take effect from next year, forcing GLCs to meet stricter financial and operational standards. Those that fail to improve risk closure, while leaders who underperform may be removed. The state expects these changes to strengthen Sabah’s economy and drive long-term development.