According to The Edge, justice Ahmad Bache dismissed the application filed by Lee & Man Paper Manufacturing Ltd and Grant Thornton Consulting Sdn Bhd to strike out the suit by Pelangi Prestasi Sdn Bhd.
The report said Lee & Man Paper, a China-based firm, was appointed by the Warisan-led Sabah government to take over SFI while Grant Thornton is involved in the restructuring of firms.
The suit will be heard on Dec 7 and 10.
Pelangi Prestasi’s counsel Lim Chee Wee told The Edge that the judge had allowed the company’s injunction to restrain the implementation of a new set of pre-conditions for timber licences by the Sabah government.
The Sabah government holds a 2% share in SFI and has refused to issue timber licences to Pelangi Prestasi, which acquired a 98% stake in the paper mill company from India-based pulp and paper manufacturer Ballapur Industries Ltd in April 2018 for RM1.2 billion.
The deal would allow Syed Mokhtar’s firm to control SFI, including all assets, land titles and timber licences.
SFI came under the receivership and management of Grant Thornton after Ballapur Industries faced financial difficulties in running the firm.
It manages a 712,000-acre forest estate in the southwestern part of Sabah.
Of this, 683,000 acres are operated under a 99-year concession granted by the Sabah government in 1996, while the rest is owned by SFI.
Pelangi Prestasi also went to court over the state government’s decision not to issue fresh timber licences to SFI, and for imposing new sets of preconditions for granting these licences.
The previous Barisan Nasional state government had, before signing the purchase agreement, agreed to approve new timber licences for Pelangi Prestasi if it fulfilled the prerequisites.
In its suit, Pelangi Prestasi also claimed to have paid in full the salaries of SFI employees since March 2018, including RM23.1 million in shortfall from January to March that year.
It said it had in doing so fulfilled part of the prerequisites set by the state government.