KOTA KINABALU: Sabah Forest Industries (SFI) Sdn Bhd has been forced to implement a temporary layoff program for its employees due to financial constraints.
A spokesperson for SFI said despite the management taking several steps to put the operations back to normal, the financial constraints it faced proved too difficult to surmount.
“In the past, the company’s operations were severely disrupted when it faced numerous legal proceedings, including winding-up petitions, until a team from Grant Thornton was appointed as receiver and manager.
“The appointed receiver and manager obtained restraining orders from the High Court here and is presently formulating a scheme of arrangement which will be subject to creditors’ approval at a later stage,” according to a statement issued by the company yesterday.
The company disclosed that the temporary layoff program will start on January 1, 2018 and would involve approximately 1,350 employees.
It said the program was announced yesterday at the SFI hall in Sipitang which was attended by over 1,000 employees.
“Neehar Aggarwal, chief operating officer of BILT Paper, made the announcement whilst providing background and details of the program. Dr Jim Lai, senior executive director of Grant Thornton, also explained the planned steps ahead to resolve the situation via a sale process.
“This was followed by a Q&A (question and answer) session, where questions raised by the audience were addressed by company officials and representatives of Grant Thornton,” the statement said, adding that the company has already notified the Sabah Labour Department prior to the implementation.
The company, which has been paying salaries to its employees despite not being in operation, said that the duration of the program is expected to last up to the end of June 2018.
“They (employees) would be paid full salary for the month of December 2017. Starting January 1, 2018, SFI will continue to pay 50% of the basic salary and 50% of the fixed allowances to affected employees.
“Affected employees are not required to report for work and are free to work elsewhere during this period. Employees are also allowed to continue to stay in the company’s housing colony, including enjoying the use of water and electricity as before,” it added.