Tabung Haji deposits rose RM1b as of Dec 2018, but CEO still cautious

Lembaga Tabung Haji Director Datuk Seri Zukri Samat arrives at the Tabung Haji headquarters in Kuala Lumpur January 15, 2019. ― Picture by Hari Anggara
Lembaga Tabung Haji Director Datuk Seri Zukri Samat arrives at the Tabung Haji headquarters in Kuala Lumpur January 15, 2019. ― Picture by Hari Anggara

KUALA LUMPUR, Jan 15 ― Tabung Haji (TH) had a net increase of over RM1 billion in deposits as of December 2018 despite the mass withdrawals in the preceding month, its chief executive revealed today.

Datuk Seri Zukri Samat told a press briefing here that the Muslim pilgrimage fund the outstanding deposits for 2017 was RM73.5 billion, but over RM74.5 billion in new deposits came in for the same period last year.

There were 31,000 new accounts opened during the time even as news broke out that large number of depositors had withdrawn after TH was revealed to have irregularities that led to losses totalling RM4.1 billion.

“Yes there were withdrawals of RM10 million, but still there were increases in new deposits,” Zukri told reporters here.

He added that TH remains cautious when asked if the rise in deposits meant public confidence towards the fund was restored.

Depositors’ trust crumbled after news about the losses surfaced, leading to panic withdrawals by institutional depositors that reportedly reached billions in ringgit.

“As you can see the deposits increased...but I don’t want to pre-empt,” he told reporters.

TH revealed late last year that it was short of RM4.1 billion in assets when it paid out the 2017 dividends to depositors, and therefore in breach of the Tabung Haji Act 1995 that states hibah, or dividends, can only be paid if the fund had made distributable profits.

Last month, the fund said Minister of Finance through a newly set up Special Purpose Vehicle (SPV) will be acquiring its underperforming properties and equities in exchange for RM10 billion in sukuk and RM9.9 billion in Islamic redeemable convertible preference shares (RCPS-i).

The move came after Minister in the Prime Minister Department Datuk Mujahid Yusof Rawa claimed TH had accrued RM4.1 billion in losses as a result of poor investments, most of them highly questionable.

TH is now under Bank Negara Malaysia supervision as part of the fund’s turnaround plan, which will focus on enhancing transparency, oversight and better governance.

The supervisory role covers deposit taking activities and focused on corporate governance, including fit-and-proper assessments, risk management and internal controls, and liquidity management.

The fund will also conduct a quarterly review of its performance starting this year. Past reviews were done on a yearly basis.

Zukri said TH is optimistic that this, coupled with the move to transfer its under-performing assets to the MoF SPV, would restore some trust in the fund. All asset transfers totaling over RM19 billion were completed as at December 31, 2018.

“Previously there was nobody to supervise the deposits apart from the Board and the minister in charge,” he said.

“Under BNM supervision there is a higher level of supervision and I think this can improve confidence.”