Tabung Haji still chasing 884mil riyal arbitration award from Saudi firm

Tabung Haji (TH) is persistently pursuing the remaining arbitration award of over 884 million Saudi riyal from Saudi-based property developer and management firm Al-Rawda Real Estates Development & Project Management Co Ltd. The government-owned trust, led by Religious Affairs Minister Zulkifli Hasan, is determined to recover the funds after receiving only 14.9 million Saudi riyal (approximately RM16.2 million) of the total award, according to Bernama.

In November 2024, TH and Al-Rawda mutually agreed to settle the dispute, with TH paying a portion of the 899 million Saudi riyal (around RM982 million) before Al-Rawda failed to adhere to the agreement's terms. TH has since terminated the settlement agreement and is resolute in its efforts to secure the remaining arbitration award, including engaging a consulting firm with expertise in asset tracing.

During a special briefing at the Dewan Rakyat, Zulkifli Hasan presented the findings of the royal commission of inquiry (RCI) on TH and discussed the actions taken to restore the institution's financial position. The RCI identified Al-Rawda as one of 14 troubled investments linked to losses exceeding billions of ringgit. In 2015, 2016, and 2017, TH leased four hotels in Makkah and Madinah, paying around RM1.55 billion upfront to Al-Rawda for a 10 to 18-year lease.

This transaction was deemed extraordinary and atypical, with TH appointing Al-Rawda as the operator of the hotels under a management and operation agreement, receiving only a promissory note guaranteed by Al-Rawda's owner, Mashhoor Ali Omar Almadoodi. Al-Rawda has shown no rental income since March 2019, prompting TH to initiate enforcement proceedings in Saudi Arabia.

Following a final award in favor of TH on April 16, 2023, Al-Rawda was ordered to pay the 899 million Saudi riyal.