Wednesday, December 12, 2018

Tabung Haji bleeding billions in cash -Evidence from TH's audited cash flow statements has been available since at least 2016

by Ganesh Sahathevan

by Ganesh Sahathevan 

This report and others like it confirm what was reported by this writer (who was then promptly condemned as an ignorant infidel) on 5 February 2016 :
PAS president Datuk Seri Hadi Awang (pic) has urged Lembaga Tabung Haji (TH) depositors not to withdraw their savings hastily from the financial institution concerned.
He said, although a mistake was made by the previous administration of TH, it was not appropriate if there were some depositors who wanted to do so because the role of the institution was also to take care of the welfare of those going for the haj and and not solely focused on the economic sector.
"Not apt (to withdraw savings from TH) because what is important is to repair TH. Don't throw out the baby with the bathwater. If there is a mistake (in the TH administration), we correct it,'' he said in the ‘Bicara Minda' programme organised by Sinar Harian here Wednesday (Dec 12).

Now read on:

First Published  On Sahathevan Blog On 5 February 2016

by Ganesh Sahathevan

The following figures (in  Ringgit million ) have been extracted from Tabung Haji's audited financial statements for the relevant years.  The  figures are from the cash flow statement, not the profit and loss,for the cash flow statement gives a better picture of how much cash a business has gained or lost. In that way it is  more a  objective assessment of a business' performance,for profit and loss numbers are easily manipulated.
These numbers show how much cash TH has mostly lost from its ordinary business operations.
The "Group" column is a consolidated figure ,summing up cashflow from operations of all the companies TH controls.The "Tabung Haji" column shows what Tabung Haji earns on its own, without counting the companies it controls.
We usually look at the Group figure to provide a better overall view of the business,and in this case one can see that in the past 4 years, the Tabung Haji Group had a positive cash flow from operations in only 2013.In all other years it has lost billions in cash.

Net cash used in operating activities
Group Tabung Haji
-1 767 361
-1 150 025
-1 354 224

-1 863 515
205,63 -1 335 595
-2 268 827 -1 108 847

However, in the case of Tabung Haji the Group figure is not so useful for there is no guarantee that TH can draw on the cashflow of Group companies to meet its financial obligations ie its obligations to depositors who can at anytime demand their money.
As shown in the table above, TH has been losing billions in  cash over the past four years.
While its overall cash position might be positive, this is due to borrowing, sale of investments, property and the like. That can never be the basis for a any business, particularly one that has immediate demands on cash from depositors.
In any case, a large significant deficit of cash from operations will ultimately impair any business' ability to raise funds,and will push it into disposing  assets at fire sale prices.

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