TH recovery plan will make it more efficient — Geostrategist
KUALA LUMPUR: The move to place Lembaga Tabung Haji (TH) under Bank Negara Malaysia’s supervision and the establishment of a special purpose vehicle (SPV) company in TH’s comprehensive recovery plan will make it a more efficient organisation, says a geostrategist.
Professor Dr Azmi Hassan of Universiti Teknologi Malaysia said TH should have been placed under BNM’s supervision right from when it was first established to ensure good governance as a deposit-taking institution.
“Placing TH under the government’s supervision should have been done from the start as TH keeps the deposits and therefore its governance should have been in accordance with the banking law, just like other banks.
“If there was any defect in its governance, it would have been easy for them to reprimand and to correct it,” he told Bernama in an interview yesterday.
Earlier yesterday, Minister in the Prime Minister’s Department Datuk Seri Dr Mujahid Yusof announced that TH would be placed under BNM’s supervision beginning next month to improve its governance.
The move is part of a comprehensive turnaround plan to improve TH’s balance sheet as it had recorded a deficit of RM4.1 billion as of Dec 31, 2017.
Theplanincludestheestablishment of the SPV this month to take over, restore and maximise the recovery of underperforming assets, as well as sales of the assets to improve TH’s financial position.
Azmi said the SPV would ensure that TH’s liabilities are separated, allowing it to focus on providing more efficient hajj pilgrim management.
However, he opined that the SPV would have an impact on depositors’ sentiments as the recovery plan would affect its bonus rates which were usually rather high.
“This is because in accordance with Tabung Haji’s provisions, a bonus cannot be given if its liabilities exceed its assets, so I expect that the bonus will be lesser following the recovery plan.
“Dividends and bonuses can be given when there is a recovery through the establishment of the SPV, as TH’s assets will exceed its liabilities and in this scenario, dividends can be distributed according to the profits from investments,” he said.
Asked on the proposal by former Pandan Member of Parliament Rafizi Ramli to establish an independent audit team to conduct a comprehensive audit of the management of hajj operations, Azmi said an internal investigation was sufficient.
“This method is more effective as the former chairman, chief executive officer and the upper management will be taken to court following the results of the internal investigation by the new management,” he said.
RAM Ratings wins Best Rating Agency award for second consecutive year
KUALA LUMPUR: RAM Ratings was named Best Rating Agency 2018 at the recent Islamic Business & Finance – South-East Asia (SEA) awards ceremony, held at the InterContinental Hotel Kuala Lumpur.
This is the second consecutive year that RAM has won the award in recognition of its outstanding services and contributions to Islamic finance, particularly sukuk.
“It is an honour for RAM to once again be acknowledged for our efforts in promoting sukuk in Malaysia and the region. The receipt of Islamic Business and Finance’s inaugural award last year and again this year highlights RAM’s dedication and contribution to the global sukuk market.
“We would like to extend our thanks and appreciation to our clients and associates for their continuous support,” expressed Foo Su Yin, CEO of RAM Ratings.
The Islamic Business & Finance SEA Awards recognise the very best in Islamic/syariah-compliant banking products and services, as well as the best performing Shari’ah-compliant financial institutions.