Finance Minister II Datuk Seri Amir Hamzah Azizan said the government had stepped in with a RM10.2 billion bailout during the institution's 2018 restructuring to protect depositors' savings and its ability to distribute hibah.
He said the government's intervention was carried out in accordance with the Tabung Haji Act and was necessary to restore the institution's financial position.
"Without the bailout, the problem would have been much bigger in this country," he said when winding up the special debate on the Royal Commission of Inquiry (RCI) report on Tabung Haji in the Dewan Rakyat today.
Amir said the government had ultimately borne RM10.2 billion as part of the rescue exercise.
The restructuring involved transferring underperforming and troubled assets from Tabung Haji to Urusharta Jamaah Sdn Bhd (UJSB), a wholly government-owned company.
He said the assets transferred had a value of about RM9.6 billion, while the government effectively paid about RM19.8 billion, creating a RM10.2 billion uplift for Tabung Haji.
The move, he said, was necessary to strengthen Tabung Haji's balance sheet and protect depositors.
"If we had not rescued Tabung Haji, there would have been no opportunity for Tabung Haji to provide hibah in the years that followed."
Amir also defended the government's obligations under the sukuk issued as part of the restructuring.
He said the sukuk had a maturity value of about RM27 billion, compared with an issuance value of around RM19.6 billion, with the difference representing the return to Tabung Haji.
He said Sukuk 1 had subsequently been restructured from a zero-coupon instrument into one that pays annual coupons.
The restructured instrument carries a return of 3.86 per cent, which Amir said was higher than the yield on comparable government securities.
He said Tabung Haji would receive about RM440 million annually from the restructured sukuk.
Amir also gave an assurance that the government would honour its obligations under the sukuk.
"Whenever there is financial room in the government, we will provide early redemption for the sukuk."
He said the government had previously made provisions to redeem the sukuk but had faced fiscal pressures arising from the Covid-19 pandemic and other major financial obligations, including RM13 billion in 1MDB-related payments in 2022.
However, he stressed that the government had never defaulted on its debt obligations.
"Every loan issued by the government is always fulfilled. We will continue to pay."
Amir's assurance came after MPs raised concerns over the RCI's warning that Tabung Haji could face payment-default risks if the government failed to fulfil its guarantee commitments.
The minister also said the government had not sold the assets transferred to UJSB to outside parties as part of the restructuring.
Instead, he said UJSB had sought to rehabilitate the assets before returning them to Tabung Haji.
Amir said the restructuring had helped strengthen Tabung Haji's position, allowing it to continue declaring hibah while improving its governance and financial controls. - FMT
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