TABUNG Haji has assured depositors it will pay hibah (bonus) to depositors for 2018, although the amount will be smaller compared with previous years, the fund’s group managing director and chief executive officer Zukri Samat said today.

The fund is able to pay the bonus after restoring its balance sheets following the transfer of assets to a special purpose vehicle.

“We have restored the balance sheet of Tabung Haji, putting us in a position to pay hibah for 2018. The amount will depend on our financial performance, but don’t expect too much.

“For 2019, God willing, Tabung Haji will be in a much better position,” Zukri said at a media briefing at its headquarters in Kuala Lumpur today.

Zukri’s assurance comes a month after the government revealed that hibah paid out by the pilgrims’ fund since 2014 had been done unlawfully.

The law that governs Tabung Haji requires its assets to exceed its liabilities in order to make such payments. 

The fund had a deficit of RM4.1 billion as of December 31, 2018.

A SPV has been formed to rehabilitate and maximise the recovery of Tabung Haji’s underperforming assets.

“The SPV transactions are deemed complete as of December 31, 2018. We have received the lawyer’s comfirmation that all transfer of assets have been signed and all rights have been novated.

“To enhance transparency, Tabung Haji will provide quarterly updates on financial performance, so that our depositors can track how we are doing,” Zukri said.

Among the assets transferred to the Finance Ministry-owned SPV, are properties and equities, he said.

Of this, 106 listed domestic equities in agriculture, oil and gas, property and construction entities, which previously experienced loses of RM4.6 billion, have been transferred to the SPV.

“The loses sustained are 51% of the market price,” Zukri said.

Also transferred were a plantation, 29 properties and empty plots of low-yield land.

Zukri said some of these assets had long-term potential for profits, but Tabung Haji could not afford to wait as the fund’s priority was to restore depositors’ confidence.

“With the weak sentiment, we can’t afford to wait to be sure when these assets can be profitable,” he said, adding that some of these included Tabung Haji’s equities in UEM Sunrise Bhd, Malakoff Corp Bhd and FGV Holdings Bhd.

A key asset that has been transferred to the SPV is a plot of land at the Tun Razak Exchange (TRX) bought in 2015 for RM189 million, he said.

The deal then was controversial as Tabung Haji had bought the land at below-market price from 1Malaysia Development Bhd (1MDB) in a transaction seen as a bailout for the troubled state investor.

The fund’s property arm TH Property Sdn Bhd was to develop the land, but Zukri said last month the land has been idle for the past three years and was returning “zero” yield.

With the transfer of non-performing assets to the SPV, Tabung Haji is able to issue RM10 billion sukuk bonds for seven years, as well as Islamic redeemable convertible preference shares (RCPS-i) worth RM9.90 billion, Zukri said today. – January 15, 2019.