Wednesday, February 19, 2020

Tabung Haji & TH Properties -Developments in Australia suggest Team Azeez is still pulling the strings despite the change in management, are they still able to harm depositors' funds?

by Ganesh Sahathevan

                                         Is Team Azeez still pulling the strings at Tabung Haji
                                         and its subsidiaries, including TH Properties. 

As reported yesterday on this blog Tabunbg Haji's Australian JV partner has contacted this writer in an attempt to remove articles about Tabung Haji's JV in Sydney.

Readers may recall that Tabung Haji and TH Properties responded with a statement that said, among other things:

Lembaga Tabung Haji argued that all investments directly made by TH Properties were sourced from internal funds

That claim has been disputed by this writer, given Tabung Haji's cashflow problems that were evident from its financial statements: 

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


 Govt to bear more than RM10.3b losses in Tabung Haji's rescue plan, if assets depreciate

KUALA LUMPUR: Urusharta Jamaah Sdn Bhd (UJSB), a wholly-owned unit of the Ministry of Finance Incorporated, highlighted if the assets transferred from Lembaga Tabung Haji (LTH) were to depreciate further, the government will incur losses higher than RM10.3 billion.
Among non-performaning assets transferred into UJSB include 1.568 acres at Tun Razak Exchange (TRX).
In a statement today, UJSB said the LTH rescue plan which was completed on December 28, 2018, involved a transfer of non-performing assets worth RM9.63 billion from LTH to UJSB in exchange for RM19.90 billion.
It consisted of two tranches of Sukuk totalling RM19.6 billion and RM300 million respectively in cash payable to LTH.
"The difference of RM10.3 billion between the consideration of RM19.9 billion and RM9.63 billion market value of assets is to be borne by the government to ensure that the financial health of LTH is restored," UJSB said.
It cautioned that if the value of the assets depreciates further, the government will incur losses higher than RM10.3 billion.
The assets transferred into UJSB are made up of listed equity holdings, properties and one unlisted plantation asset.
The property assets transferred to UJSB include 1.568 acres at Tun Razak Exchange (TRX).
"The land was purchased by LTH at RM188.5 million or RM2,760 per sq ft. This is significantly higher than that paid for by 1Malaysia Development Bhd (1MDB) at only RM75 per sq ft (or RM5.1 million for 1.568 acres)," the statement said.
The land was then purchased by UJSB from LTH at RM400 million (RM5,856 per sq ft), which does not reflect the actual market value of the TRX land.
The purchase was at 112.2 per cent premium to what LTH paid in April 2015 (RM188.5 million or RM2,760 per sq ft).
"In a recent valuation exercise conducted in March 2019, the market value of the said TRX land stood at only RM205 million.
"The huge difference between the market value and the purchase value of the land (95 per cent premium over market value), together with all the other assets acquired by UJSB, was needed to ensure the successful rescue and restructuring plan of LTH," UJSB said.
UJSB will bear significant losses as a result of impairment charges estimated at more than RM10 billion for the assets acquired from LTH.
It noted that the TRX land transaction itself will result in an impairment charge of RM195 million.
"With the transfer of assets now completed, UJSB will continue with its mandate and purpose, which are to carry out the rehabilitation and restructuring of assets under its care.
"We will maximise asset recovery value and redeem all monetary instruments issued by UJSB and subscribed by LTH in a timely manner," the statement said.

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