The government has been accused of failing to fully honour its financial commitment to Tabung Haji by replacing RM11.5 billion of a matured sukuk with a new debt instrument due in 2036, rather than settling the amount in cash or equivalent assets.
Former economy minister Rafizi Ramli said the UJSB Sukuk Series 1, which matured on May 29, involved RM12.5 billion that the government should have redeemed through cash or assets of equivalent value.
"However, of the RM12.5 billion that needed to be settled, only RM965 million was in the form of property, namely a plot of land in TRX and plantation land in Sarawak.
“The remaining RM11.5 billion was settled in the form of another new sukuk, which will mature in 10 years, meaning the government will have to pay Tabung Haji RM11.5 billion in 2036," the Bersama co-leader said in a statement.
Rafizi said that the financial restructuring of Tabung Haji approved by the government at the end of 2018 depended on the government’s ability and compliance in fulfilling its financial commitments to Tabung Haji when they are due.
Under the arrangement, he said the federal government took over Tabung Haji’s loss-making assets through wholly government-owned Urusan Jamaah Sdn Bhd (UJSB), which then issued two series of sukuk to Tabung Haji.
He added that the government was then expected to replace these with cash or assets of equivalent value when they matured in 2026 and 2029, respectively.
Focus under RCI report
Rafizi said that these matters are the focus of the Royal Commission of Inquiry report on Tabung Haji, which also highlighted several other points.
"The move to transfer Tabung Haji’s troubled assets and replace them with a sukuk instrument on paper, without cash flow, was a temporary measure, solely to enable Tabung Haji’s reserves to become positive and allow it to continue paying hibah (profits).
"The government needed to make allocations from its annual budget to ensure its commitments were fulfilled when they fell due, namely in 2026 and 2029.
"Assets held on paper through sukuk instruments made Tabung Haji’s assets and annual income accrued from the sukuk appear better, but this remained dependent on whether cash or equivalent assets were injected back to replace these paper assets when they matured," he listed.
Over RM17b approved in 2019
Rafizi said the government had approved at least RM17.8 billion on April 5, 2019, during former prime minister Dr Mahathir Mohamad's administration to cover the shortfall in the redemption of UJSB sukuk.
The commitment was subsequently continued under the 12th Malaysia Plan (12MP) during Ismail Sabri Yaakob’s administration and, he believed, under Prime Minister Anwar Ibrahim thereafter, through the 13th Malaysia Plan (13MP).
“However, the financial commitment to restore Tabung Haji in accordance with the recovery plan under UJSB does not appear to have been honoured.
“So far, only RM500 million has been paid to Tabung Haji to redeem the UJSB sukuk,” Rafizi said, citing the RCI’s findings.
Rafizi added that the RM1.5 billion allocation approved under Budget 2021, during Perikatan Nasional's administration, was also not paid to Tabung Haji, with the government citing the need to use the funds for economic recovery following the Covid-19 pandemic.
He said billions of ringgit were subsequently allocated for projects under Jana Wibawa, some of which were later investigated over alleged corrupt practices, while part of the allocation had been committed to Tabung Haji.
“Throughout my time as economy minister, I recall that the government had allocated more than RM1 billion a year to settle this UJSB sukuk when it matured on May 29 this year,” Rafizi added.
He then urged the government to provide a frank explanation during tomorrow’s parliamentary debate on where the billions of ringgit allocated over the years to restore Tabung Haji had gone to.
“If the current and future governments continue to defer their commitment to redeem the UJSB sukuk into the future by continuing to replace one debt instrument with a new one, Tabung Haji will continue to face the risk of asset liquidity and cash flow problems in the future,” he warned. - Mkini
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