Lembaga Tabung Haji

Image result for TH’s assets are short of RM4 billion compared to their liabilities (depositors’ money) in 2016.

The following is based on what has been reported but yet to be confirmed by Lembaga Tabung Haji.

TH’s assets are short of RM4 billion compared to their liabilities (depositors’ money) in 2016. It’s now the end of 2018. Is the shortfall bigger? The 2017 accounts are not out.

Another report says that every RM1 of deposit is only backed by 80 sen of assets, a huge 20% capital loss!

It was also said that the accounts were faked to allow TH to pay dividends prior to GE14. The Tabung Haji Act requires its assets to be more than its liabilities before it can pay dividends. (Naturally! Otherwise, it is a Ponzi scheme of using capital to pay dividends).

To allow LTH to pay dividends again, it must increase its asset value. How? Apparently, there is a scheme to set up an SPV. Get the SPV to buy the assets from LTH at book value. Voila! LTH can continue to pay dividends.

But is this prudent? The problem hasn’t gone away, has it?

The SPV is to raise sukuk to buy the assets at an expensive price. How to service the sukuk? Another Government guarantee? TH depositors’ money is already guaranteed by the Government. Service financing obligations, pay dividends. Where is the money to come from? How did it become so bad?