KUALA LUMPUR: Urusharta Jamaah Sdn Bhd (UJ) defended the rescue plan which saw it acquiring a mixture of listed equity holdings as a move to rescue Lembaga Tabung Haji (LTH).
The assets transferred to UJ consist of a mixture of listed equity holdings, 29 properties and one unlisted asset.
They include four operating hotels, namely TH Hotel Kota Kinabalu; TH Hotel Bayan Lepas; TH Hotel & Convention Centre Alor Star; and TH Hotel & Convention Centre Kuala Terengganu.
“However, the transfers do not include land or assets under TH Plantations Berhad (in which the shares remain under the ownership of LTH)” said the wholly-owned subsidiary of the Ministry of Finance in a statement today.
It said that as part of the plan to revitalise and improve the financial performance of the acquired assets, UJ created a wholly owned subsidiary, UJ Property Management Sdn Bhd (UJPM), to assume operations of the four hotels.
“This exercise will not involve redundancies at TH Hotel & Residence Sdn Bhd (THHR) as approximately 90 per cent of its existing staff will be absorbed into UJPM, with the remaining 10 per cent to be absorbed by THHR Kelana Jaya.
"Under the new management, the hotels will operate and remain shariah-compliant under the new name Raia Hotel from April 1, 2020.
“UJ has further approved funds to improve hotel facilities and service quality,” it said.
The statement also strongly denied all malicious and false allegations that the Finance Ministry or Finance Minister Lim Guan Eng had irresponsibly shut down TH Hotels and subsequently dismissed the affected hotel staff.
UJ also condemned all irresponsible and false allegations including various viral social media posts maligning Lim, including one which carried a death threat.
“The Minister of Finance was not involved in the decision-making for the above restructuring exercise or any decision that pertains to UJ. He did not even attend any meeting on any of the matters relating to UJ,” it said.
The statement said the management of UJ and its assets were governed by the board of the company which was chaired by the Treasury Chief Secretary, Tan Sri Ahmad Badri Mohd Zahir.
It said that all the Board of Directors, Chief Executive Officer Izad Sallehuddin, and the senior management of UJ were Muslim professionals.
“With this rescue package to protect the interest of LTH contributors and to help nurse LTH back to health, LTH will no longer need to bear the RM10.3 billion losses on the value of these assets, as the losses are borne by UJ and the Malaysian government.
“LTH will also no longer need to be burdened with the risk of further losses on these transferred assets.”
Following the change of government in 2018, accounting firm PwC was appointed to conduct a financial position review on LTH.
After their review, PwC discovered various steps were taken by the previous administration to artificially inflate and manipulate the profitability of the fund.
The findings included not prudently recording the impairment of assets and suspicious financial transactions to book inflated profits in order to pay dividends.
The PwC report also noted that LTH’s liabilities exceeded its assets and hence required a rescue and restructuring plan by the Government to ensure the fund remains a going concern.
In January 2019, LTH lodged a police report in connection with its 2017 financial statements.
Following the revelations, a rescue package was proposed by LTH and tabled by Minister in the Prime Minister’s Department Datuk Seri Dr Mujahid Yusof which was approved by the Cabinet on Dec 7, 2018. This package was subsequently presented in Parliament on Dec 10, 2018.
As was proposed in the rescue plan involving the pilgrimage board saw RM9.63 billion worth of assets from LTH were acquired for the sum of RM19.9 billion via issuance of 2 series sukuk and cash to LTH. This means that the Government effectively paid RM10.3 billion more to rescue LTH, the statement said.
UJ said as a result of the restructuring exercise, LTH had already demonstrated the seeds of recovery by registering a profit of RM1.3 billion for the first nine months of 2019. For the same period, its total assets have also improved, exceeding its liabilities by RM2.3 billion.