Grant Thornton loses suit against Sabah over nixing of SFI logging permits

Malay Mail
Malay Mail

KOTA KINABALU, Nov 16 — The High Court today struck out Sabah Forest Industries’ (SFI) suit against the Sabah chief minister and government over the cancellation of its timber licence agreements (TLAs) following the closure of its pulp and paper mill in November 2016.

High Court judge Amelati Parnell ruled that Grant Thornton, who filed the suit as SFI’s receiver and manager, did not have any authority, power or jurisdiction over its TLAs as these were not charged assets to which Grant Thornton had been appointed.

“Therefore, Grant Thornton has no authority to commence judicial review proceedings to challenge the chief minister’s decision to cancel SFI’s timber licence agreements,” she said.

“The chief minister, after giving SFI an opportunity to be heard, decided that it was in the public interest to cancel SFI’s timber licence agreements for, among other things, SFI shutting down its operations in 2016 and its failure to fulfil the purposes for which the said timber licence agreements were granted,” said counsel for the state government, Tengku Datuk Fuad Ahmad.

He also said that the terms of the TLAs clearly stated they cannot be charged without the chief minister’s written consent.

“Therefore, as SFI’s timber licence agreements were never charged, it follows that the receiver and manager cannot have any authority or power to sue the chief minister for his decision to cancel the said agreements.”

Grant Thornton were represented by S. Vanugopal and Jayen Marimuthu.

SFI, the paper mill, has faced for years of management issues and not paying its staff.

It was initially allowed to partially resume minimal harvesting, as prescribed in the Forest Management Plan and its annual work plan, but the state government reverse the decision in May of last year and terminated its licences and operations.