Mujahid: Tabung Haji paid dividends illegally since 2014 as debts exceeded assets

(The Star) – Lembaga Tabung Haji (TH) has been illegally paying dividends (hibah) to its depositors since 2014, says Datuk Seri Dr Mujahid Yusof Rawa.

The Minister in charge of Islamic affairs explained that the dividend payments had contravened the Tabung Haji Act 1995 as TH had more debts than assets in the previous years.

He cited TH’s 2017 financial report, tabled in Parliament on Monday (Dec 10), which showed that it has more liabilities (RM74.4bil) than its total assets (RM70.3bil).

This meant a total deficit of RM4.1bil as of Dec 31, 2017.

According to Dr Mujahid, the Tabung Haji Act 1995 clearly stated that two conditions must be fulfilled before giving dividends.

First, its assets cannot be less than its debts and second, there must be profits to be distributed.

“TH has been declaring hibah since 2014, not in accordance with the Act, because its assets have been less than its liabilities,” he told reporters during a press conference in Parliament on Monday (Dec 10).

TH’s 2017 financial report, audited by PricewaterhouseCoopers (PwC), had recommended the Government initiate a “comprehensive turnaround plan” to address the RM4.1bil gap, said Dr Mujahid.

Under the plan, Dr Mujahid said PwC had proposed setting up a special purpose vehicle (SPV) to take over, rehabilitate and maximise the recovery of its underperforming assets.

He added that the SPV has been approved by Cabinet and it will be in operation before the end of 2018.

Dr Mujahid said that TH will be placed under the supervision of Bank Negara Malaysia (BNM) on Jan 1, 2019, and expressed confidence that the turnaround plan will be implemented by the government as soon as possible

“Cabinet had discussed the turnaround plan thoroughly and given our full support and endorsement to the plan, so that TH’s financial position can be regularised and the people’s confidence can be restored.

“To ensure the long-term sustainability and resilience of TH, the government has decided to place it under the supervision of BNM administratively, from Jan 1, 2019.”

Meanwhile, Dr Mujahid also said depositors may receive their dividend payouts for 2018.

“Now that the restructuring plan is here, if we can fulfil two conditions and if there is profit, then definitely we will get (dividends).

“But that will be announced before the end of the year, we have not close out accounts for the year yet.”

Dr Mujahid also hinted that further action may be taken against the previous administration of TH.

“Since 2014, TH has been giving dividends without fulfilling the two conditions. So, where did they get the money? I leave that to you,” he said.

“That will be dealt with later,” he added.