Liew (right) receiving the mock cheque from Dr Lai (3rd left) after the latter had received it from Lee (2nd right), witnessed by Dr Yusof (2nd left) and Hadikusumo (left)
SIPITANG: The 12-year plight of 760 Sabah Forest Industries (SFI) workers affected by the company’s financial problems has come to a happy ending with the out-of-court settlement of their claims for alleged unpaid annual salary increments from 1997 to 2006.
As far back as 2007, a group of 1,072 employees had engaged lawyer Christina Liew (now Datuk and Api-Api Assemblywoman) to represent them in commencing legal action against SFI seeking, among others, the recovery of allegedly unpaid annual salary increments due to them from 1997 to 2006.
On February 8, 2008, the SFI employees claimed an accumulated total of about RM23 million from the LION Group. They filed their cases together through their counsel in the Labour Court in Sipitang.
(Some of them have reportedly retired or gone to their rest).
On Tuesday (Sept 1), a settlement amount of RM3,454,153.53 as outstanding dues was paid out to the 760 unsettled claimants in the first phase of payment under the Settlement Agreement and Release signed between LION Posim Berhad (LPB, formerly known as LION Forest Industries Berhad) and Sabah Forest Industries Sdn Bhd (SFI) (Receiver and Manager-appointed).
The sum is LPB’s portion for 4.5 months’ wages.
The Settlement Agreement and Release was signed in August this year.
LION Group Chairman Tan Sri William Cheng’s representative, LION Group Senior General Manager Peter W.K. Lee presented a mock cheque for the sum of RM3,454,153.53 to Dr Jim Lai, the Senior Executive Director of Grant Thornton Consulting Sdn Bhd (representing the Receiver and Manager of SFI, Dato’ Narendrakumar A/L Chunilal Rugnath, of Grant Thornton Consulting Sdn Bhd) who in turn handed it over to Liew (former counsel from CJ Liew & Co), now caretaker Deputy Chief Minister cum Minister of Tourism, Culture and Environment at Dewan SFI here.
Caretaker Minister of Education and Innovation, Datuk Dr Yusof Yacob, who represented caretaker Chief Minister Datuk Seri Mohd Shafie Apdal, and lawyer Josephine Hadikusumo, who represented CJ Liew & Co, witnessed the presentation ceremony.
According to Hadikusumo, Liew was the first lawyer from CJ Liew & Co. to have handled the claimants’ case until her ministerial appointment in the Warisan-led State Government in May 2018.
In her address, Liew said Tuesday’s amicable settlement was evident of the noble intention of all parties to reach a closure of the conflict that erupted 12 years ago, to ensure the issue will not be prolonged.
“The move is also a clear acknowledgement of the important contribution of all workers to the State’s economy,” she said.
Speaking to reporters later, Liew said : “I am glad their ordeal is over now and they can move on in life, after more than a decade of mental anguish, losses and economic hardship.
“The tedious process of negotiation in reaching a settlement of their claims in the Labour Court has borne fruit.
Finally, we have succeeded in settling the longstanding problem out of court.
“It was a tortuous journey for the SFI workers in seeking justice but there was light at the end of the tunnel. We had gone through the Labour Court, High Court, Court of Appeal, Federal Court and back to the Labour Court.”
According to Liew, the plight of the SFI workers started in 2007 after India-based pulp and paper manufacturer Ballarpur Industries Ltd (BILT, India’s largest manufacturer of writing and printing paper) purchased the company for RM945 million cash from the debt-laden Lion Group. The State government retains its 2.22pc share.
SFI, which was set up by the Berjaya administration under the leadership of Tan Sri Harris Salleh as a wholly-owned company of the State Government, ran into financial difficulties following two privatisations after PBS had formed the State Government.
In retrospect, Liew said, in April 2009, the workers took SFI to the Labour Court here for a total claim of RM23,851,935.47. They claimed that SFI had allegedly breached the terms and conditions of the contract of employment.
“The Labour Court dismissed their case (involving 980 workers) claiming that it had no jurisdiction to hear out their claims.
“The workers appealed to the High Court in Kota Kinabalu. In July 2009, the High Court ruled that the Labour Court has jurisdiction to hear their case against SFI.
“However, SFI appealed against the High Court’s decision in the Court of Appeal. In May 2012, the Court of Appeal dismissed the appeal by SFI and the company then applied for leave to appeal to the Federal Court.
“The Federal Court dismissed the application for leave, and the case was returned to the Labour Court for proceedings,” she said.
In June 2017, Dato’ Narendrakumar A/L Chunilal Rugnath of Grant Thornton Consulting Sdn Bhd was appointed as the Receiver and Manager of SFI. He was appointed by a consortium of banks pursuant to certain security documents. On 13 July 2017, Datuk Alex Decena of Messrs Jayasuriya Kah & Co acting for the Receiver and Manager applied under the Companies Act to restrain some [200 over] of creditors, a number of whom had already filed proceedings against SFI, from winding up the company. A restraining order is still in place for this purpose.
The restraining order was needed in order to salvage SFI as a going concern due to the socio-economic consequences it would have on SFI workers should the company be wound up.”I was present in court to oppose the bid to liquidate SFI, realising that the winding-up would result in unemployment for the majority of the workforce in Sipitang,” she recalled.
On 4 April 2018, Pelangi Prestasi Sdn Bhd, a Kuala Lumpur-based company, entered into a conditional agreement to purchase the Sipitang Pulp and Paper mill and its assets. This sale is currently under litigation in the courts in Kota Kinabalu and Kuala Lumpur.
On 28 August 2017, SFI ceased operations leaving almost 1,500, mainly local employees in employment uncertainty.
In December 2017, Liew in her capacity as Sabah PKR Chief had called on the State Government to immediately intervene and assist the 1,350 employees of SFI who would be affected by the temporary layoff scheme that would begin on January 1, 2018. “The State government had the moral duty to assist these SFI employees,” she was quoted as saying.