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KOTA KINABALU: The Sabah state government has been urged to stop a RM 300 million loan approved by the Sabah Bhd Development Bank (SDB) to AirAsia.
SAPP president Yong Teck Lee said the state bank has a mandate to provide development financing to projects in Sabah and not to risky companies.
He said it is not in the best interests of the Sabah government and SDB to risk their limited funds to keep AirAsia afloat.
“If help is needed to keep both AirAsia and Malaysia Airlines afloat, then it is the federal government that must take over,” he said.
“What is RM 300 million compared to the RM 66 billion debt AirAsia is exposed to? How can RM300 million from SDB’s meager funds help keep AirAsia afloat?
“RM300 million is only 4.5% of AirAsia’s debt exposure. Instead, the 300 million ringgit can go a long way to help revive Sabah’s economy by providing loans to the housing, agriculture or construction sectors in Sabah, ”Yong said.
“The airline industry is not something SDB should take risks with during the Covid-19 pandemic. Any banker and businessman knows what crisis the airline industry is facing. As reported, AirAsia is already being sued by Malaysia Airports Holdings for RM78.16 million, ”he said.
Yong also asked if the RM300 million loan exceeds the single borrower limit according to banking standards.
“As the new government just took office three weeks ago, it is safe to say that the loan was approved during the last government era. SDB should be responsible for approving the loan, ”he said in a statement today.
According to local and international media news reports, SDB has approved a 300 million ringgit loan to AirAsia “to keep the airline afloat amid the coronavirus pandemic.”
Yong questioned what repercussions there would be on the loan if the airline had not recovered after two months. “What if AirAsia ends up as Dragon Air (which was closed), a subsidiary of the mighty Cathay Pacific, Hong Kong’s flag carrier?”
