Former workers of Koperasi Serbaguna SANYA Berhad (KOSAN) say they are being left to suffer in silence after the cooperative abruptly shut down operations and retrenched its staff last October—without offering any form of compensation.

Five months later, they are still waiting to be paid.

“Every former worker is now demanding and urging that the compensation be paid immediately because the financial pressure on our families is getting worse. Hari Raya and Kaamatan are coming up; there are school expenses for our children, unpaid bills for water, electricity, car loans, and many other payments,” one of the retrenched workers said.

Koperasi Serbaguna SANYA Berhad (KOSAN) was established in 1976 as a Sabah government-linked cooperative to support Bumiputera entrepreneurship and provide employment through cooperative-led businesses.

Over the years, KOSAN became known for manufacturing school uniforms and shoes under a long-standing contract with the Sabah government. 

It operated two factories—one in Tuaran for garments and another in Papar for footwear.

The cooperative’s operations were heavily reliant on the government contract, which was terminated in April 2024. 

With no alternative income, KOSAN was forced to halt production at both facilities, leaving 230 employees without work.

According to Tuaran MP Datuk Seri Wilfred Madius Tangau, who has taken up the worker’s cause after receiving a letter from of a former worker, the layoffs were not accompanied by any compensation package under a voluntary separation scheme (VSS), prompting the Labour Department to step in.

“The termination was done without considering the workers’ right to receive compensation, as is standard practice under a VSS. 

“As a result, the Labour Department is now involved in defending the workers’ rights, and KOSAN is being required to pay compensation on top of benefits from SOCSO,” he said via his Facebook page on Sunday. 

Tangau revealed that former workers had reached out to him in desperation, prompting him to meet with several of them to better understand the scale of the crisis.

KOSAN, which operates as a cooperative under the Sabah government, is also jointly owned by its employees. 

But while the affected workers are technically shareholders, they are now being told that even calling an Extraordinary General Meeting (EGM) is not financially feasible.

“I asked the stakeholders why an EGM wasn’t held to discuss a solution to this crisis. 

“The answer was: ‘It’s very difficult because organising an EGM would require at least RM100,000 in expenses.’ KOSAN simply doesn’t have that kind of money anymore,” Tangau said.

He questioned why no alternative method of consultation has been initiated, noting that the cooperative’s own members—many of them retrenched workers—have both the right and the need to meet urgently.

“They are not just ex-staff—they are part-owners of this cooperative. Yet they’re being denied even the most basic right to meet and decide what comes next,” he said.

Tangau said his service centre has reached out to both current and former board members of KOSAN, and has received some insight into how the situation spiralled into a full-blown crisis.

“I have made efforts to understand this issue in depth by meeting with several members and former board directors of KOSAN. From them, I’ve gathered some information and data that explain how this crisis has reached such a challenging level,” he said.

One of the proposals now being floated is to call an EGM using a minimal-cost model—since the workers are shareholders and could theoretically agree to hold the meeting informally to approve key resolutions. 

These include proposals to liquidate assets in order to meet urgent financial commitments, particularly those owed to the retrenched staff.

“Only an extraordinary idea can solve an extraordinary challenge.” 

“Among the forward strategies that can be discussed is passing a resolution to approve the sale of enough assets to resolve KOSAN’s pressing commitments. But in the end, the decision lies with the members themselves,” said the Tuaran MP. 

Tangau said his parliamentary office will continue engaging with all stakeholders in the coming weeks to ensure the matter is not left unresolved. – March 23, 2025