Lawsuit Against Audit Firm Shows Sabah's Transparency On Financial Management, Says Masidi

KOTA KINABALU, Aug 20 (Bernama) -- The Sabah state government, Sabah Development Bank Berhad (SDB), and two other parties have filed a lawsuit against audit firm Ernst & Young PLT, a move the state government says reflects its commitment to transparency in managing Sabah's finances and funds.

Sabah Deputy Chief Minister II Datuk Seri Masidi Manjun said the state government is committed to sound financial management and stronger governance. 

“I think it is best that we leave the court process to determine the outcome. We have filed our case, and we will await the next court proceedings. 

“But what is certain, symbolically, this shows Sabah’s openness. We have nothing to hide. As for SDB, we have sued all creditors, regardless of who they are.

‘We are truly serious about ensuring that our state’s treasury and finances are carried out properly and transparently,” he said at a press conference on the 2026 state-level National Day and Sabah Day celebration here today.

"We hope this approach will foster a better governance culture," said Masidi, who is also State Finance Minister. 

On Aug 7, the Sabah state government was reported to have filed a civil suit of over RM2 billion against audit firm Ernst & Young PLT in the Kuala Lumpur High Court, concerning the audit of SDB's financial statements for the financial years 2011 to 2022.

The legal action was filed by the Sabah state government, Sabah Chief Minister Datuk Seri Hajiji Noor, SDB (a state-owned development bank) and SDB Corporation Sdn Bhd as plaintiffs.

According to the statement of claim, the plaintiffs allege that EY breached its duty of care when conducting statutory audits of SDB's financial statements, resulting in the bank's true financial position not being detected earlier.

-- BERNAMA