MINISTER in the Prime Minister’s Department Mujahid Yusof Rawa today pointed at his Barisan Nasional predecessors and the old Tabung Haji (TH) board for the billions in losses suffered by the pilgrims’ fund.

Explaining the TH issue, which had “long taken root”, in the Dewan Rakyat today, he said the previous BN administration took no heed of former Bank Negara Malaysia governor Zeti Akhtar Aziz’s warning in December 2015 that the fund’s reserves were in the red.

In her letter to then TH board chairman Abdul Azeez Abdul Rahim, Zeti said the fund’s reserve levels were in the negative and TH would not be able to pay its 8.8 million depositors any dividends in 2016 if it did not take steps to resolve this.

“But the old government ignored this warning and continued to allow high hibah (dividend), even though TH did not make enough profits and would cause the fund financial risks.

“The opposition (Pakatan Harapan) raised this issue several times in 2016, but the government, including the then minister and deputy minister, denied and claimed all was well at TH,” Mujahid said.

He said both the minister and his deputy took no action to resolve the issue or save TH, leaving things to the fund’s management – which had politicians for board members – to act and make decisions.

As a result, TH had insufficient assets to cover its liabilities, recording RM10.2 billion in losses.

Mujahid said the value of investments had cost the fund RM11.9 billion, but the assets from the investments were only worth RM9.7 billion as of December 31, 2018.

TH’s accounts were also subjected to “manipulations after manipulations” while high dividends were paid out, he added.

“The minister in charge approved and allowed TH to manipulate the share prices that fell three times in the same year.

“According to financial report standards, a company has to declare its losses if its shares fell 20%.

“But TH, with the minister’s permission, set the share price drop (threshold) at 70%, and then changed it to 85% and 90% after that. This falsification was with the minister’s permission and the board’s approval,” he said.

Azeez, who is Baling MP, ceased to be TH chairman after the federal government changed last year.

Mujahid did not name the former minister and former deputy minister, but it is understood that he was referring to those in charge of the Islamic affairs portfolio before him.

BN’s Senator Jamil Khir Baharom from Umno was the minister in charge of Islamic affairs during the former Najib Razak administration.

His deputy from 2015 until May 2018 was Senator Asyraf Wajdi Dusuki, the current Umno Youth chief.

Mujahid said the previous TH leadership clearly cooked the books to cover up losses incurred.

“With profits that did not exist, TH continued to give 6.25% hibah in February 2018, involving RM2.7 billion that resulted from manipulated accounts.

“This also went against the Tabung Act 1995,” he said.

Mujahid said the change in government saw TH’s management replaced by professionals tasked with saving the fund and recovering its financial health.

He said the new management also discovered more misappropriations by the previous administrators.

“The former management hid several important information that involved the 2012 sale of 25% shares in PT TH Indo Plantations.

“They also made several investments that led to losses, like in Felda Global Ventures shares that incurred losses up to RM1.1 billion,” he said.

TH also made losses of RM670 million from its attempt to save Ramunia Holdings Bhd and RM144 million from buying 30% of Putrajaya Perdana’s ownership, he added.

Mujahid said in order to rescue TH, the government had set up a special purpose entity, Urusharta Jamaah Sdn Bhd, to take over TH’s RM9.7 billion underperforming assets at RM19.9 billion.

The government would also inject RM17.8 billion into TH, and fund the Islamic statutory body for 10 years from 2020 to 2030.

“The government will set aside RM500 million in 2020, and then RM1.73 billion annually until all the sukuk has been redeemed.”

To avoid further account manipulations, TH would also be supervised by the central bank to ensure that it meets all standards in its operations and function without political interference.

Mujahid also said TH had so far showed improvements since it was placed under the management of professionals, who have the full support of the government.

As of financial year ended December 31 last year, TH’s assets were valued at RM76.5 billion, with a RM1 billion surplus, he said.

“The financial position has recovered, compared to the RM4.1 billion deficit in 2017.

“TH’s accounts have also been balanced. Underperforming assets have been handed over to the SPV and replaced by high value sukuk. Following this, TH will be able to offer RM913 million in hibah, which is at 1.25%.

“With the recovery success these six months, and if the restructuring is successful, the 2019 hibah will be better. TH will also progress further,” Mujahid said. – April 10, 2019.