by E.S. Shankar, Donplaypuks® intrepid correspondent for cooking the haj books affairs
It's one thing when a government of Kleptocrats breaks just about every law to cling on to power. Quite another when a government that is democratically elected to replace it, indulges in illegal sleight of hand and iffy accounting practice to rescue Tabung Haji (TH) in order to remain popular.
Let me say what many want to, but dare not even in this era of 'New Malaysia'. Ever since Tabung Haji was founded in 1963, it has benefited only one class of Malaysian citizens i.e. Malaysian Muslims. So, when it is clear that TH is very shaky financially due to a combination of poor government oversight, UMNO appointing ill-qualified cronies to its top management and internal and external fraud:
Why should Taxpayers' (MoF) money be used to bail it out? Why did the government not order $300 billion Permodalan Nasional Bumiputra (PNB) and other Bumiputra funds to come up with a rescue plan? Why were TH profits monopolised but now billions of ringgit of losses, being socialised?
How is it that a government on an austerity drive and acknowledged RM1 Trillion in total debt, liabilities and guarantees could find RM20 billion just like that for TH?
How is it that a government on an austerity drive and acknowledged RM1 Trillion in total debt, liabilities and guarantees could find RM20 billion just like that for TH?
In any event, what is unacceptable in MoF rushing in where angels fear to tread with its RM20 billion rescue plan is:
1. Transfer of "underperforming" TH assets/investments at book value. As TH has admitted that these assets are currently giving a return of "under 2%", how is it legal for MoF to take over these assets at book value and not REDUCED market value?
2. More so as TH was deliberately in breach of Malaysian laws, i.e. accounting standards which require writing off impairment/diminution in value provisions in the Profit & Loss Account. This was illegally done to ensure its balance sheet was positive, fool the government into thinking it could continue paying dividends and protect UMNO/BN from Malay Muslims taking to the streets in protest BEFORE GE14 on 9 May 2018!
3. What about Real Property Gains Tax (RPGT) on the RM188.5 million 1MDB land? Conveniently waived?
4. Why should the MoF guarantee TH 5% return on assets, i.e. RM7 billion over the next 7 years, when it is now earning under 2% income? And what if in 7 years time, TH's RM20 billion of assets sink further? Who will bear the losses? Us? Again? Given these are dud assets, what is the likelihood MoF will ever make a profit on them? On its investment in FGVH alone, TH is losing more than RM1 billion.
5. On what basis does government have so much confidence in placing TH under Bank Negara Malaysia's (BNM) "supervision" when it failed to act promptly and decisively on more than RM4 billion of money stolen from 1MDB that went in and out of Najib's personal bank account and massive fraud and failures at FGVH and Felda LKTP?
So, how did Finance Minister Lim Guan Eng allow himself to be arm-twisted into a dodgy deal and breaking the law by PM Mahathir? Why have DAP and PKR kept silent on this bailout? Why have Nurul Izzah, Wan Azizah, Azmin Ali, Rafizi and other top Muslims in PKR not condemned this bailout? Because, like the child marriage and female genital mutilation issues, one should not rock the boat in case the "natives get restless"?
When will the Pakatan Harapan government and politicians STOP doing the wrong thing by allowing UMNO and scum Opposition to pull out the "natives are restless" bogeyman card everytime instead of calling their bluff?
So, what is the right thing to do with the gigantic cock-up at TH? That's so obvious that it defies belief Mahathir and his Ministers have not worked it out:
1. Sack all the Directors and senior managers involved in breaking the law and charge them in court. Put them away under lock and key for 20 years. That will send a clear message to particularly Malaysian Muslims that crime will not pay and what's haram cannot be made halal by fraud and accounting gimmickry.
2. Carry out a new audit and revaluation of ALL TH's assets and liabilities and establish it's true financial position on a group basis. Many amateurs are looking only at TH's balance sheet and profit & loss accounts and not at the Group's financial situation and concluding that TH can afford to pay dividends.
A new audit/revaluation can be completed within a month, max two, especially as we already have the last (2017) audited accounts (by the Auditor General) and two reviews by Ernst & Young (EY) and Price Waterhouse & Coopers (PWC). It's not rocket science.
TH should classify its assets and liabilities under current and long-term assets and liabilities. That will give a much clearer picture of its ability to pay dividends. Amateurs, please take note. Ultimately, it's an entity's cash position that will determine how much dividends can be paid. No cash, no talk!
3. TH's Memorandum & Articles (M&A) MUST be amended so that in future it can only pay dividends IF its total Reserves are positive. No dividend should be paid based on unrealised profit on shares and other investments and land and properties. This would be a more prudent policy and in line with best practices in public listed companies.
4. Immediately stop the filthy habit of appointing Party cronies to top positions in GLC's and Quango's (SPAD/SPAN/HRDF/MAVCOM, Plc Chairmanship etc). This is the main reasons these entities have lost hundred of billions of ringgit via fraud and pathetic, gross mismanagement. Recruit only qualified, experienced professionals and those with proven track records; forget race or religion. Never compromise on merit.
When this exercise is completed, I suspect TH will be in the red by about RM10-15 billion.
In the final analysis, it will not do to try and patch up stage 3 cancer at TH with electoplast and two panadols! The Pakatan Harapan government must take the higher ground and not allow TH to get off easy with fancy and expensive, guaranteed Sukuk Bonds/ Redeemable Convertible Cumulative Preferential Shares (RCCPS) and false accounting to facilitate the payment of unsustainable dividends. Do not pass the buck to the Taxpayer. It's time PNB was roped in to save their brethren.
