Data shows TH’s 4 largest holdings had reported negative share prices performance YTD
By DASHVEENJIT KAUR / Pic By TMR
The value of Lembaga Tabung Haji’s (TH) exposure in listed firms has shrunk more than RM1 billion in the last eight months as key investee companies’ share prices were hammered throughout the year.
A check on Bloomberg showed the fund’s total equity asset for the first quarter of 2018 (1Q18) stood at RM4.61 billion. However, the value had fallen below the RM4 billion mark to RM3.97 billion in 2Q18 and RM3.77 billion in 3Q18. To date, its equity investment is valued at RM3.2 billion, about RM1.41 billion short of its 1Q18 figure.
Traditionally, funds do not report the drop in share prices as losses if it had not disposed of the stakes.
Large fund managers will keep the shareholding and hope the market and counters will recover.
TH, the government-linked fund manager which is embroiled in a police investigation over malpractices, has investment in 100 companies. Data compiled by Bloomberg showed TH’s four largest holdings had reported negative share prices performance year-to-date (YTD).
The FTSE Bursa Malaysia KLCI, which closed at 1,699.72 yesterday, had only lost 5.4% compared to TH’s holding losses.
The fund, which deposits are guaranteed by the government, has a 78.82% stake in TH Plantations Bhd — the latter’s share price had lost half of its value in the last 11 months.
The stock had lost 50.47% of its value in the past 52 weeks and RM472.86 million of its total market value had evaporated this year alone.
Yesterday, TH Plantation’s shares closed at 52 sen, half of its value compared to early this year, with a market capitalisation of RM464.02 milion.
The planter also posted its first quarterly loss since 1Q16 when it slipped into the red during 3Q18. The company blamed the low crude palm oil pricesand lower volumes for the dismal quarterly performance.
TH also holds a 53.47% stake in BIMB Holdings Bhd, the parent company of the country’s first Islamic financier. BIMB has posted a stronger financial performance, registering a 8.28% increase in net profit year-on-year (YoY) in 3Q18.
However, its share price had slumped 10.98% YTD. The company, which was valued at RM7 billion at the start of this year, now has a market capitalisation of RM6.45 billion.
BIMB has paid dividends to TH due to its strong earnings.
TH is also the largest shareholder in IT company Theta Edge Bhd with a 68.7% stake. As at Sept 30, 2018, Theta Edge posted a net loss of RM1.1 million compared to a net profit of RM5.96 million a year ago.
Theta Edge has declined 39% in the past 52 weeks to 29 sen a share, compared to 48 sen in January. Its market value has decreased over RM20 million YTD, valuing the company at RM31.1 million as of yesterday.
Another TH investee company, TH Heavy Engineering Bhd (THHE), is a Practice Note 17 (PN17) firm. TH has a 29.8% stake in the company, which has until April 25, 2019, to submit a regularisation plan to the regulatory authorities — its third deadline after being granted an extension twice.
THHE has accumulated losses of RM697.07 million as at June 30 this year. However, in 3Q18, the company posted a net profit of RM100.76 million compared to a net loss of RM32.15 million a year earlier. Over the last 11 months, THHE’s share price has lost 60% of its value to four sen, compared to 10 sen in January this year.
About RM67 million of its market capitalisation had disappeared this year and the oil and gas fabrication and construction company is now valued at RM44.85 million based on yesterday’s close.
The 2017 Auditor-General’s (A-G) Report released yesterday highlighted that TH board had failed to record an asset impairment of RM227.81 million in three subsidiary companies and three associate companies, especially its investment in THHE amounting to RM164.58 million.
Last Friday, the RM64 billion haj pilgrim fund lodged two reports with the Commercial Crime Investigation Department, implicating former chairman Datuk Seri Abdul Azeez Abdul Rahim, former CEOs Tan Sri Ismee Ismail and Datuk Seri Johan Abdullah, as well as four top officials.
The first report alleged that RM22 million from Yayasan Tabung Haji (YTH) — a foundation for the underprivileged formed in 2016 — meant for programmes in 2017 were disbursed for politically-linked activities.
The second report was related to the misrepresentations and the withholding of material information involving TH’s 2012 sale of a 95% stake in PT TH Indo Plantations held by its subsidiaries TH Indopalms Sdn Bhd and TH Indo Industries Sdn Bhd.
The 95% stake was sold to PT Borneo Pacific for US$910 million (RM3.79 billion). TH Indo Plantations owns a total of 83,000ha of palm oil estates in Indonesia.
The reports lodged last Friday were the first following internal investigations into past transactions, spearheaded by the new management since July 2018.
Singapore’s The Sunday Times had reported that TH management had “faked last year’s accounts to justify its dividend payout” of up to 6.25% just before the May 9 elections, which brought the total to RM2.7 billion, quoting sources.
The newspaper also said the fund’s assets are short of the RM64 billion current deposits.
In early 2016, it was reported that Bank Negara Malaysia had issued a warning to TH to strengthen its risk management practices, after a routine check found that the pilgrims fund had more liabilities than assets. It was reported that the fund had 98 sen in assets for each ringgit in liabilities.
Meanwhile, Abdul Azeez yesterday denied the allegation that he had misused RM22 million from YTH for political activities.
He claimed the money was obtained from various sources, including contributions from corporations and special allocations from the government and individuals for YTH’s welfare and social programmes.
“The programmes include for the poor and destitute, disabled persons and single mothers nationwide through the ‘Ziarah Kasih’, ‘Jom Bantu Rakyat’, and ‘Ziarah Kasih Ramadan’ programmes for a year.
“The RM22 million fund is not TH depositors’ money. It is tithe from profit of TH investments, totalling RM7 million, and the balance contributed by Umno, the federal government and companies that have never had business with TH to carry out activities during the Ramadhan in 2017,” he said at the Parliament lobby, according to Bernama.
Umno and PAS had claimed the latest financial revelations against TH were politically motivated.
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