KUALA LUMPUR, March 18 — The government restored Lembaga Tabung Haji’s (LTH) financial health by transferring problematic assets to a special purpose vehicle, Datuk Seri Mujahid Yusof Rawa said in Parliament today.
The religious affairs minister was responding to questions about the pilgrim fund’s financial standing after it was previously revealed that its liabilities exceeded its assets.
Jempol MP Datuk Salim Sharif asked why the government did not consider options besides a SPV and whether the asset transfer would affect depositors.
Mujahid explained that the SPV was chosen to avoid requiring the government to issue a guarantee or infuse funds into LTH.
“Now with the success of the recovery plan and restructuring, in December 2018, we successfully placed our assets at RM76.5 billion compared to the liabilities and deposit of RM75.5 billion.
“This means we have closed the gap opened wide by the previous administration, and with that, we will issue dividends that we will soon,” he said.
In December, Mujahid disclosed that LTH was in deficit as liabilities exceeded assets by RM4.1 billion and had been paying dividends unlawfully.
The Tabung Haji Act 1995 prohibits the payment of dividends, or hibah as they are called in Islamic financial terms, if LTH is in deficit and has no distributable profits.
The government then created a SPV to acquire underperforming LTH properties and equities in exchange for RM10 billion in sukuk and RM9.9 billion in Islamic redeemable convertible preference shares (RCPS-i).