Chan, 32, and his Filipino worker, Maslan, 20, were taken in a speedboat from their farm in Kunak, by at least four gunmen during a 12.45am raid on Monday.
There are reports that Maslan escaped from their clutches after he jumped off the boat and swam ashore to lodge a report.
Police are hunting for the gunmen, who have apparently crossed over to Tawi Tawi province in southern Philippines with their hostage.
Sabah CID chief Senior Asst Commander Omar Mammah said the kidnappers, who were apparently wielding “long guns” – possibly M16 rifles – rowed into the fish farm jetty, some 500 metres from the Sapang coast.
“Chan and his wife came out of their room on hearing noises outside,” he said. “The gunmen immediately confronted Chan and ordered him into their boat while his wife managed to escape.
“We are not sure when they picked up Maslan as the wife did not see him,” he said, adding that the worker had been close to the couple’s room at the farm, which Chan and his two partners had only opened three months ago.
Omar said the gunmen, believed to be a Tawi Tawi-based kidnap-for-ransom group, had quietly slipped into the farm by rowing the boat.
“The whole raid took less than five minutes – no shots were fired,” he said, adding that the farm had two other workers in addition to Maslan.
All security forces under the Eastern Sabah Security Zone had been mobilised and a hunt was immediately launched, Omar added. Police are also checking on Maslan’s background to see if he was a legal worker besides follow-up operations to find any local links.