TH plans to put a cap on each depositor’s fund

KUALA LUMPUR: Lembaga Tabung Haji (TH) is looking to put a cap on each depositor’s fund as one of the measures to reduce government liability and exposure of the investors.

Group managing director and chief executive officer Datuk Seri Zukri Samat ( pic) said the move to limit individual deposit at a suitable level was part of TH’s business restructuring plan which is awaiting board approval.

“Depositors’ fund is guaranteed by the government whereby the government has to pay in full should anything happen to the fund, unlike banking institutions that only have to pay a maximum of RM250,000 through the Malaysian Deposit Insurance Corp (PIDM) to the depositors no matter how much money they put in,” he told Bernama yesterday.

However, he stressed that the plan would not be executed now as the board was handling some issues relating to panic withdrawals by depositors, triggered by some “misreporting” on the pilgrimage fund recently.

"We are not going to do it now because it will compound the problem that we have now. We want to let the current situation settle first before we kick off our plan,” he said.

He noted that withdrawals by depositors went above the normal level on Tuesday, triggered by a news report.

The TH Recovery and Restructuring Working Plan unveiled in Parliament recently revealed a high concentration of deposits among a small segment, whereby 1.3% or a mere 117,000 of depositors contributed 50% of its deposits, including a single depositor who had more than RM190mil in the fund.

Zukri hoped that the business restructuring would return the fund to the original objective that it was set up for, which was to help Muslims perform their hajj.

"We want to go back to our original mandate. We are reviewing our business model now, which includes exiting our investments in some sectors which are not giving us positive returns.

“We have started the review process but we have not gone to the board for endorsement. We know what sectors that we want to exit which are not making money such as information technology and plantations,” he explained.

On the allegation that the fund would be controlled by the DAP following the announcement that TH would be put under Bank Negara’s supervision beginning next year, Zukri said this was incorrect.

“In this case, Bank Negara only supervises the deposit-taking activities while other parts of TH activities remain under the jurisdiction of the current ministry (the Prime Minister's Department).

“TH is only put under the supervision of the central bank, not the Finance Ministry or its minister Lim Guan Eng. If that's the case, then all other banking institutions including Islamic banks, which have been put under Bank Negara are also under DAP based on their claim,” he said. — Bernama