The Royal Commission of Inquiry into Tabung Haji has called for the recovery of RM2.19 million in bonuses paid to selected directors and officers of TH Properties Sdn Bhd, after finding that they were approved without following the required legal procedures.
In its 252-page report released last night, the RCI said bonus payments made by TH Properties in 2017 and 2018 had breached provisions under the Companies Act 2016, as the necessary approvals and shareholder resolutions were not obtained.
According to the report, TH Properties in 2020 consulted law firm MD Tajuddin & Co regarding the bonus payments in 2017 and 2018.
The commission said it agreed with the firm’s legal opinion that the 2017 payments by the TH Properties board had violated Sections 230(2) and 230(4) of the Companies Act 2016, while the 2018 payments had breached Section 230(3) of the same Act.
“The commission examined documents and meeting minutes relating to the issue of bonus payments to members of the board and certain employees of TH Properties.
“The bonus payments given to members of the TH Properties board and certain employees in 2017 and 2018 were made on the grounds that development projects in Australia, particularly The Bay Pavilion, had made significant financial contributions to TH Properties in 2016 and 2017,” it said.
The report added that the project was claimed to have generated returns of A$11.6 million (about RM35 million) for TH Properties.
“The commission found that several selected individuals were given special bonuses amounting to RM1,148,400 in 2017 and RM1,045,000 in 2018.
“The commission therefore recommends that efforts be made to recover the bonuses that were given to those involved, as the said bonuses were granted without complying with the prescribed regulations,” the report read.
The commission found that the bonuses were approved for two directors, two former directors, and six officers.
Excessive bonuses
The commission’s review also found that bonuses given to Tabung Haji employees were extremely high from 2010 to 2017, ranging between two and 13 months, including annual and special bonuses.
“The commission’s examination found that the bonus payment process went through three levels of approval, namely the board, the religious affairs minister, and the Finance Ministry.
“Generally, the religious affairs minister and Finance Ministry would only receive bonus payment proposals as recommended by Tabung Haji management and the board.
“This included the proposal for an extraordinary bonus payment in 2014, at a rate of one to 11 months’ salary for the annual bonus and two months’ salary for the special bonus, with the overall amount potentially reaching 13 months’ salary, involving an allocation of RM74 million,” the report read.
It added that the Finance Ministry had explained to the RCI that bonus payments for Tabung Haji employees exceeding two months were subject to the minister’s consideration and discretion.
This took into account, among others, Tabung Haji’s financial performance, operational activities, financial obligations, investment performance compared with previous years, the productivity performance of its members, and the financial implications of paying bonuses.
It also considered the recommendations of the board and the religious affairs minister.
“The commission is of the view that, taking into account the financial issues faced by Tabung Haji from 2014 to 2017, where the value of assets was lower than liabilities as reported in the annual financial statements and acknowledged by the National Audit Department, this proves that the granting of high bonuses by Tabung Haji was inappropriate,” the report read.
It explained that the high bonuses were granted because Tabung Haji assessed its assets based on real asset value, which showed it had recorded substantial profits throughout those years.
However, the commission noted that from the beginning of the 2018 financial year to date, the granting of bonuses to employees has been controlled according to Tabung Haji’s financial capabilities. - Mkini
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