Tabung Haji Empress Dowager Or Special Perompak Vehicle

---

After dinner and over drinks (mine was Light Coke) last night, an elderly former corporate man turned businessman joined our table for conversation. He was venting out his frustration over the state of the nation and destruction of wealth that is happening since May 8th.

He was “... angry. I can’t take it any more!” like in the 70s movie classic, Network. Lembaga Tabung Haji (LTH) was not spared. There were many areas of agreement with his general observation, but we reminded him the danger of generalisation.

Everyone at the table, including one close to the current government, agreed the appointment of Dato Azeez Rahim as LTH Chairman was a mistake and root cause. We did not agree then but was dumbfounded when Tun Dr Mahathir gave his consent for Azeez to accept the appointment. It was happier days with the then and now PM.

Dato Dr Asyraf Wajidi and few PAS politicians are right to advise not to succumb to the trial and judgement by the media.

Unless one can put one’s finger on exactly what wrong was done, one should just read news report and watch the public drama in stride.

There is a a decline in depth, ability and inquisitiveness in the current crop of mainstream reporters.

The gentleman agreed with us that Azeez is not stupid.

He may lack in higher education, but he was aware it is not easy to push his way through the layers of commitee he has no control over, and the 10 membered Board of Directors to give the final decision.

Only police report on YTH? 

If Azeez did any nonsense, it will be elsewhere and not at LTH.

After being repeatedly remanded by MACC for questioning in September, no charges have been levelled.

All the talk he was being investigated for wrongdoing at LTH, new management only made a police report of him for Yayasan Tabung Haji receiving RM5 million donation from UMNO, among the many.

So many parties missed out on the clause in YTH’s M&A on no involvement with political parties. Unless someone stole money or there was money laundering or CBT involved, it will be a slap in the wrist from ROS or Company Commission, whichever it is.

It was obviously directed towards Azeez. Is it confirmation there is no case to pin on Azeez yet?

Indonesian plantation

The second police report made by LTH on the sales of Indonesian plantation is something to be concerned.

While LTH claimed they got a good price for it, it is heard there was problems in securing the payment after Memorandum of Transfer was signed with only 5% paid and still problematic after discount was given. The current issue of Edge Weekly seemed to have a good account.

However, it is still one side of the story. Any professional manager would not make such a blatant mistake. Quite sure there are valid reasons for the various actions.

Has the reporters and journalists ponder to ask why? What actually happen? So on.

Negative asset? 


The fact that Edge got a detailed account of it and earlier Singapore media leak on shortfall of RM4 billion in LTH’s asset to its liabilities (thus making it a contravention with the LTH Act 1995 to giveout the hibah (Islamic dividend) to depositors) made us suspect this is orchestrated.

Sometime in the week after the Singapore leak, we told an ex-banker at an Arab restaurant in Ulu Klang over late lunch of our suspicion that we wish to comment of these development.

LTH-BIMB politics? 


Our concern is LTH has more pressing problem from the fall in the value of their investment in stock market, the fall in commodity prices affecting their plantation, and rising cost of Haj with subsidies already more than 50% of the cost.

Why then is new management playing “politics”?

There are members of the new Board of Directors are reknown for their office politics. The new management of LTH headed by Dato Zukri Samat had an issue with the former management of LTH. As major shareholder of Bank Islam, LTH wanted to have their people to head the Bank.

However, an Empress Dowager resisted and insist on Zukri. By cavorting with BNM, she managed to get them to reject LTH’s proosed candidate and also former LTH and Bank Islam Managing Director, Dato Johan Abdullah kicked out of the Board of Directors.

Apparently, there were other Senior Management kicked out for disagreeing with Zukri’s policy to make more loan provisions by instituting new more stringent policies in recognising bad debts. They made shorten the time for it and Bank Islam suffered major losses.

The losses was politicised by then opposition as failure and ineffectivenss of then government and LTH was accused of mismanagement.

Someone was saying the Empress Dowager with the strong link to BNM was brought into LTH. Now BNM Governor is also another Empress Dowager. It leads to a perception they are getting even with previous management of LTH.

SPV 


The ex-banker then told us about a plan to do a Special Purpose Vehicle to take out the assets facing diminution in value out of the books.

We reminded him of Danaharta and Effective Capital Sdn Bhd to buy up CLOB shares. In the past, SPV had always been a legalised Special “Perompak” Vehicle. 

Now Zukri used to work with Danaharta.

Zeti's 2015 letter

Then we told the ex-Banker about Tan Sri Zeti’s 2015 letter to LTH and Minister in charge in which previous management denied her claim.



Then we were told of the plan to turn LTH into a deposit taking company and his LTH contact alerted him to wait out for a PC.

Mujahid ignorance of accounting


Then Mujahid Yusof Rawa gave a statement with the allegation of haram hibah or illegal dividend given out. He quoted Price Waterhouse Report, which was rebuted it came with an Ernst & Young attachment which confirmed reports given by previous management shows asset was more than liabilities.


Mujahid’s was merely reading the prepared statement without understanding it. His education and work experience does indicate he may not understanding his allegation.

Asyraf Wajidi was right to caution on the differences in accounting interpretation the lead to the allegation of asset less than liablities and illegal hibah. The differences should be put in the right perception.

LTH is a government statutory body operating under its own act that dates back to the early 1960s with a new law instituted in 1995. As such they are audited by the Auditor General and their accounting policies is determined by AG and conform to government practices, not MASB.

LTH do adopt certain MASB practises and when adopted, it remain consistently practiced. It is a gradual adjustment as to not be disruptive on LTH operation.

The issue of under declaring losses as claimed by PWC is a matter of their opinion but is not relevent. THHE can write off their losses at one go but LTH do not necessarily have to follow suit. Their policy as practise and it has been consistently practise is to stagger the writing off of losses.

Subsequently, AG from Tan Sri Ambrin to present Tan Sri Mardinah for 2017 has confirmed LTH has confirmed with the requirement of the act and can give out dividend.


It is only an issue for a certain insiduous reason.

Islamic Banks conspiracy


Mujahid announced Tabung Haji will be under the supervision of BNM and Edge Weekly article on deposit by Tabung Haji will be capped is confirm today.

We go back to Zeti’s 2015 letter. Apparently, that letter came about because Islamic banks (which is not only Bank Islam, Bank Muaamalat and A Rajhi, but include conventional banks with Islamic bank subsidiaries) complained to BNM, they were unable to get deposits from Muslim.

LTH scheme with government guarantee and it is investment not savings is difficult to compete and Banks could not attract large Muslim deposits.

When they entered the market, had they checked that LTH has been in existence since mid 1960s before there was anything called Islamic Bank?

BNM unprepared


Zeti is the manipulative Empress Dowager trying to destroy the institution that originated from a paper written by her father. She commented to agree for LTH to come under BNM supervision.

A letter to Malaysiakini by a member of the Board of Directors with long resume was viral. However the message is only to ask to see the new measures in good faith and authorities have good intention.

Perhaps he should answer under what law or convention could BNM supervise LTH?

Basel Convention or the Act governing Islamic Financial Institution? Maybe Trustee Act or Securities Act but that is not BNM jurisdiction.

LTH is not a bank. Secondly, its activities are not borrowing and lending for it to require capital adequcy ratios, liquidity ratios, etc.

Making it a financial institution limits the array of investment they could do. Putting under Trustee Act limit them their investment to only cash, government bonds and trustee stocks.

Heard there is a gag order from taking about BNM limitation. Nevertheless BNM said they could only advise but the decision is left to the Managements and Board of Directors of LTH.

Special "Perompak" Vehicle

About the SPV, see the chart below.


LTH sell their valuable asset to SPV, and paid by issuance of a sukuk bond. It means LTH sold their assets and fund the buyer.

SPV is owned by MOF who will be like Danaharta that could sell the asset as they please and to anyone they please without any obligation to return the proceed to LTH.


We are not raising the issue SPV is controlled by Lim Guan Eng and lost Selangor DAP party election, Tony Pua. That would be racist.

Nevertheless, berapa kali LTH mahu ditipu dan dikencing?

---