TH paid hibah using depositor’s savings fund, says auditor's review

Asila Jalil Asila Jalil Updated 5 years ago · Published on 10 Dec 2018 6:27PM · 6 Comments

PricewaterhouseCoopers's report tabled in Parliament today shows that Tabung Haji had made two deals that made it seem as if the hibah came from the fund’s profits. – The Malaysian Insight file pic, December 10, 2018

TABUNG Haji had paid the dividends (hibah) using cash from the depositor’s savings fund instead of the profits declared, according to Lembaga Tabung Haji’s financial position review for 2017 by PricewaterhouseCoopers.

The report tabled in Parliament today showed that TH had made two deals that made it seem as if the dividends came from the fund’s profits.

The first deal involved the sale of TH’s shares in Bank Islam Malaysia Bhd (BIMB) to give the impression that it made profits before the shares were repurchased.

In 2017, TH sold RM2.551 billion of its investment in BIMB shares and generated a gain of RM553 million included in the revenue.

However in the same year, TH repurchased the shares in BIMB amounting to RM2.688 billion.

“Effectively, the sale of the shares in BIMB did not result in a cash benefit to TH, other than a gain at the TH level, which increased the profits of TH for the 2017 fiscal year by RM533 million,” said the review.

“In our discussion with the TH equity trader, he confirmed that the sales and repurchase of the BIMB shares were done to realise the upside value of BIMB shares and recognise the profits needed to meet the bonus distribution target for 2017,” it said.

It also said the sales and purchases of the BIMB shares were not disclosed in TH’s financial statements, which was supposed to be done.

The second deal made by TH involved subsidiary companies that declared high dividends, the amount of which was not fully paid.

“Dividends declared by subsidiaries amount to RM510 million, RM222 million of which remain unpaid as the date of this report.

“Although the above transactions appear commercial, we understand that the intention was to enable TH to report higher profits for the purpose of distribution to the depositors.

“This would only lead to the hibah being funded out of the cash from the depositor’s savings funds and not the profits declared.” – December 10, 2018.

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Comments

  • Paying dividends from depositors savings means the business is showing signs of collapse.
    This is a clear signal to show that TH operations are not self-sustainable.
    When this happens, the organisation will start drawing its resources (operating expenses) from assets, instead of revenue, to pay dividends!
    If a restructuring is not done soon, the THs business may not be recoverable..

    Posted 5 years ago by TTs Take · Reply

  • For the organisation to come to this stage - not being able to self-sustain, mismanagement or poor business decisions must have been made in the past couple of years.
    Thats why its showing cracks today! These cracks will get deeper and eventually break open if no remedial action is put in place, such as M&A initiatives, business restructuring & consolidation, VSS, sale of non-core businesses & assets, etc.

    Posted 5 years ago by TTs Take · Reply

  • Geez...exactly like a ponzi scheme...yet PAS and UMNO and their merry band of clueless supporters opted to protest against ICERD instead this weekend...so do continue with your mindless agenda of mempertahankan agama dan bangsa, when your own fellow Malay Muslim leaders from previoys government has raided your Hajj kitty right under your very noses.

    Posted 5 years ago by Mahsuri Smiles · Reply

  • Ponzi!

    Posted 5 years ago by Roger 5201 · Reply

  • So, will Tok Hadi organize another rally to express gratefulness that at least only most of the monies were squandered through theft/gross mismanagement, but thankfully, at least some scraps left behind to prevent Tabung Haji from going insolvent, hopefully. I am guessing Hadi will blame DAP for this.

    Posted 5 years ago by Mahsuri Smiles · Reply

  • Hadi will lead another protest and prayer group against auditors

    Posted 5 years ago by Kenneth Tan · Reply