Thursday, February 25, 2016

Rafizi exposes Tabung Haji letter giving RM1 billion corporate guarantee

The Finance Ministry had approved Lembaga Tabung Haji's corporate guarantee of up to US$228.2 million (RM960 million) to TH Heavy Engineering (THHE), PKR's Rafizi Ramli said today, following the pilgrimage fund's denial. Rafizi said the ministry's approval was given in a letter dated December 8, 2015, to Tabung Haji CEO Tan Sri Ismee Ismail. The letter was issued by the ministry's deputy chief secretary (investments), Datuk Dr Mohd Isa Hussain, in which Tabung Haji's request for approval was acknowledged in a letter by the fund on November 12 last year. "Approval was needed from the ministry as according to the Tabung Haji Act, Tabung Haji is not allowed to give financial assistance (such as 'corporate guarantees') to non-subsidiary companies," Rafizi said in a statement today, along with a copy of the letter. Rafizi said he was disappointed that Tabung Haji's management was trying to "hide" the truth instead of being forthcoming when such documents disproving its denials had been leaked. Rafizi yesterday claimed that the fund risked losing up to RM1.4 billion due to its investment in THHE, which could some day affect the amount of dividends to depositors as well as its subsidies for pilgrimage to Mecca. Tabung Haji had invested the RM1.4 billion in THHE, an oil and gas engineering firm formerly known as Ramunia Holdings Bhd, between 2008 and 2015. A large part of the investment or some RM981 million was in the form of a corporate guarantee by the fund to THHE, Rafizi had said, citing leaked documents. He disclosed more documents to the press today, which he said were leaked to PKR and included the investment risk assessment prepared by Tabung Haji's own risk management department. The document purportedly shows how the THHE investment can affect Tabung Haji's financial standing because of THHE's negative cash flow and ongoing lawsuits it was facing from some of its contractors over debts owned. Rafizi, the PKR vice-president and secretary-general, said Ismee should confirm whether the fund's investment as a corporate guarantee had been restructured into share purchases of THHE or into a loan. Ramunia in 2009 began running into financial trouble when it could not pay contractors, leading to lawsuits. In 2010, its share prices plunged from a high of RM1.95 in 2008 to 20.5 sen. Further trading of its shares was suspended from the stock market. Tabung Haji became its biggest shareholder when the troubled company was rebranded to THHE. – February 26, 2016.]]>

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