Federal govt, Jepak Holdings reach partial settlement over payment for electricity supply to rural Sarawak schools

A file photo of a supplier's boat on its way to render supplies to rural schools.

KUCHING, Feb 6: The federal government has agreed to expedite partial settlement payment for work completed by Jepak Holdings Sdn Bhd with regards to the supply of diesel and generator maintenance for 369 rural schools in Sarawak.

Quantum Electro Opto Systems Sdn Bhd (QEOS LED), the current owner of Jepak Holdings, in a statement today said the government has agreed to its proposal made in November last year to use values determined from the independent audit conducted by the judicial manager appointed by the Kuala Lumpur High Court.

“The 8-month extensive audit for work done carried out by the judicial manager was completed on Sept 22, 2021.


“However, this settlement represents only a partial settlement of the entire case, as there are further unresolved disputes and claims amongst parties that will continue to be decided and determined through the trial that is scheduled to resume in March, at the Kuching High Court,” it said.

QEOS group chief executive officer (CEO) Dr Gabriel Walter said the company expressed its gratitude to the current federal government led by Prime Minister Dato Sri Ismail Sabri Yaakob for agreeing to settle the outstanding claims for work completed as early as 2017 and until termination in October 2019.

“This will alleviate severe financial issues faced by creditors and subcontractors who had performed for the contract many years ago but was unjustly denied payment by the previous government.

“The project has been terminated for more than two years and yet the final account has not been concluded by the Ministry of Education (MOE),” he said.

Walter also asserted that the previous federal government had unjustly withheld all due payments to Jepak Holdings on an allegation that some of the signatures of the school principal on the diesel supply were doubted which merely represented less than 2 per cent of the total supply and claim.

He said the allegations were made in 2018 and to date, there has been no criminal proceeding in respect of the allegations made against Jepak Holdings.

“Furthermore, we are made to understand that the MOE had established four task forces to investigate the allegation and yet, they are unable to conclude and finalise the account.

“The previous government has withheld 100 per cent of payment due to the company since the allegation, rather than rightfully releasing the 98 per cent of the unaffected claims.

“How is this fair to 98 per cent of work completed by local contractors who performed without any issues or allegations?” he questioned.

He also said if the debt was by a private entity, the company could have applied for summary judgment and injunctions.

However, the government declared immunity against both summary judgement and injunctions, and instead forced the company to a lengthy and very expensive trial.

“Despite our various appeals, the previous government saw fit to continue to ‘punish’ the company despite the new owners having no relationship with the previous owners and management.

“If there were any clear wrongdoings in the contract, they should have terminated the project in June 2018, instead of forcing the company to continue and resume works in March 2019,” Gabriel said.

According to the statement, QEOS LED completed the acquisition of Jepak Holdings in May 2019 and was taken aback when the previous government continued to withhold payments for work done in 2019 after the project was terminated in October of the same year.

At the same time, Jepak Holdings director Ghazali Mahmood said the new government’s decision to expedite settlement payment is in accordance with true Islamic principles.

“Settlement payment should be expedited especially if it’s already audited by the independent judicial manager appointed by High Court. And any delay in payment for work verified, when the government is able to pay, is a form of government tyranny and is not Islamic,” he said.

The statement went on to disclose that Jepak Holdings will relay this decision of partial settlement to the Kuching High Court on Wednesday (Feb 9). — DayakDaily