when using chmod sftp client command
it appears that setuid / setgid bits are not handled on the server-side.

that when I

sftp> chmod 2775 afile

I would expect afile to show:
-rwxrwsr-x    1 openssh   isgreat    0 2007-04-25 00:19 afile

but I get:
-rwxrwxr-x    1 openssh   isgreat    0 2007-04-25 00:19 afile

just as if I had typed: "chmod 775 afile " on server-side.

As far as I understand sftp-server.c code is seems that

chmod(name, a->perm & 0777);

is responsible for this behavior.