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Tabung Haji risks losing RM1.4 billion, says Rafizi

Tabung Haji risks losing RM1.4 billion, says Rafizi

Lembaga Tabung Haji risks losing up to RM1.4 billion due to its continued investment in a troubled engineering company, a PKR lawmaker said as revelations continue over the fund’s questionable business deals.

Pandan MP Rafizi Ramli (pic, right) said losses sustained through Tabung Haji’s investment in Tabung Haji Heavy Engineering (THHE) could one day affect the amount of dividends to its depositors and its ability to subsidise pilgrimages.

Rafizi said Tabung Haji had poured RM1.4 billion in risky investments into THHE, an oil and gas engineering firm formerly known as Ramunia Holdings Berhad, between 2008 and 2015.

A large portion of that RM1.4 billion, totalling RM981 million, is in the form of a corporate guarantee from Tabung Haji to THHE. This financial aid had been declared high risk even by Tabung Haji’s investment risk panel, Rafizi said.

The RM981 million corporate guarantee was given even though it breached the Tabung Haji Act of 1995 which states that financial assistance may only be given to a subsidiary of the pilgrims’ fund, Rafizi added.

According to documents leaked to PKR, the RM981 million had also been approved by the Finance Ministry, Rafizi said.

Tabung Haji has 8.85 million active depositors, all of whom are Malaysian Muslims saving up money with the fund to perform the haj.

Of the remainder of the RM1.4 billion which Tabung Haji could lose, RM100 million could also come from the fall in share prices of Ramunia Holdings Berhad, which the pilgrims’ fund had bought in 2008.

It also includes RM275 million in Islamic irredeemable cumulative preference shares (ICPS) issued by THHE and bought by Tabung Haji after they were not well received by investors, Rafizi said.

Tabung Haji had also bought RM50 million worth of sukuk bonds issued by THHE in 2010.

Added to the RM981 million, these individual investments totalled RM1.4 billion in potential loss, Rafizi said.

Tabung Haji’s interest in THHE began in 2008 when it was still Ramunia, an engineering firm whose share prices had shot up due to rumours that it would be bought by a subsidiary of national oil giant Petronas.

“This was also at a time when oil prices were above US$100 per barrel and if the rumours were true, Ramunia would be getting a lot of jobs from Petronas,” Rafizi said.

In 2009 however, Ramunia ran into financial troubles and was unable to pay its contractors, causing it to be sued. In 2010, its share prices plunged from a high of RM1.95 in 2008 to 20.5 sen. Further trading of its shares was suspended from the stock market.

Yet Tabung Haji continued to invest in Ramunia and in 2010, when it was rebranded to THHE, became its biggest share holder.

Tabung Haji then bought up RM275 million in ICPS from THHE. In late 2015, it approved RM981 million in corporate guarantees even though the latter’s performance was worrying, Rafizi said.

“The question is how can Tabung Haji assure its depositors that this was a worthwhile investment and that THHE can get back on its feet in the next five to eight years at a time when the oil and gas industry has been badly hit?”

…more
Tabung Haji risks losing RM1.4 billion, says Rafizi
25 February 2016 – TMI

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