TH’s account manipulated to hide losses


The previous government adjusted Lembaga Tabung Haji’s (TH) depreciation policy to as high as 90% from the accepted norms of 20% to hide billions of investment losses and push for hibah distribution despite deteriorating nancials.

The pilgrim fund, which recently received almost RM20 billion in capital injection following an asset-for-cash deal, has conducted a forensic accounting probe to identify misrepresentations of its financials.

Minister in the Prime Minister’s Department for Religious Affairs Datuk Seri Dr Mujahid Yusof Rawa (picture) yesterday alleged that the threshold level or depreciation policy was changed three times and endorsed by a former minister. Standard financial reporting requires a company to declare losses if the equity value falls by 20%.

Mujahid said instead of reporting at 20% as impairment, TH had fixed its depreciation policy at 70%, before changing it to 85% and subsequently 90%, allowing the fund to distribute high hibah, especially 4.5% (excluding haj hibah at 1.75%).

“TH in the Barisan Nasional era had blatantly and clearly manipulated its accounts to hide the losses. With the non-existing ‘profits’, TH then paid a hibah rate of 6.25% in February 2018 (which) amounted to a RM2.7 billion payment from manipulation and counterfeiting of accounts,” Mujahid said in a statement yesterday. He said the account manipulations were against the Tabung Haji Act 1995 as the fund announced hibah despite insufficient profits.

Mujahid also revealed that the new TH management discovered Yayasan TH in 2017 allocated more than RM22 million for politically-linked activities that went against the foundation’s by-laws.

Mujahid said the fund had also incurred billions of losses in its investments including RM1.1 billion in FGV Holdings Bhd; Ramunia Holdings Bhd (RM670 million) and a 30% ownership stake in Putra Perdana Bhd (RM144 million).

He also revealed that “allowances” in the millions were paid at that time.

In total, he said TH suffered a loss amounting to RM10.2 billion due to irregularities and account manipulations.

Mujahid said the new government will inject a total of RM17.8 billion into TH to restore the pilgrimage fund.

He said the government will allocate RM500 million in 2020 and RM1.73 billion a year from 2021 until all the sukuk are redeemed.

Mujahid said the new management has closed TH’s the deficit gap and that it is capable of a hibah totalling RM913 million, or 1.25%.

Mujahid said TH’s total assets stood at RM76.5 billion, a surplus of RM1 billion for the financial year ended Dec 31, 2018.