TH distributing dividends illegally since 2014, says Mujahid

KUALA LUMPUR: Lembaga Tabung Haji (TH) has been illegally distributing hibah (dividends) to its depositors since 2014, the government revealed.

Minister in the Prime Minister’s Department Datuk Seri Dr Mujahid Yusof said the declaration and payment for hibah had contravened the Tabung Haji Act 1995 for making such payments despite recording more liabilities in the previous years.

He cited TH’s 2017 financial report tabled in Parliament on Monday which showed that it had total assets of RM70.3bil against total liabilities of RM74.4bil, showing a total deficit of RM4.1bil as of Dec 31, 2017.

Mujahid, who oversees Islamic affairs, said the Tabung Haji Act 1995 clearly stated that two conditions must be fulfilled prior to distributing dividends – its assets cannot be less than liabilities and that there must be distributable profits.

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 in Parliament yesterday.

TH’s 2017 financial report audit- ed by PricewaterhouseCoopers (PwC) recommended that the government initiate a comprehensive turnaround plan to address the RM4.1bil gap, said Mujahid.

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

He said this had been approved by the Cabinet and it would be in operation before the end of 2018.

Mujahid said TH would be placed under the supervision of Bank Negara from next month, adding that he was confident the comprehensive plan would be implemented by the government as soon as possible.

“The Cabinet discussed the turnaround plan thoroughly and gave its full support and endorsement, so that TH’s financial position could be regularised and to restore the people’s confidence.

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

Mujahid also assured depositors that they would 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 closed the account for the year yet,” he said.

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