Economists flag risk after RCI finds Tabung Haji used RM4b in management estimates
KUALA LUMPUR, Aug 18 — The Royal Commission of Inquiry (RCI) report’s disclosure that RM4.044 billion of Lem...
The Royal Commission of Inquiry (RCI) report has revealed that the Lembaga Tabung Haji (TH) used RM4.044 billion in property asset valuations for 2017, which were based solely on management estimates. Economists warn that this practice poses a significant risk to the institution's financial position. Only RM556 million of the RM4.6 billion total valuation was supported by professional valuers' reports.
Prof Emeritus Dr Barjoyai Bardai of Malaysia University of Science and Technology (MUST) states that using management estimates for determining Realisable Asset Value (RAV) exposes the institution to the risk of "overly optimistic" asset values due to management's interest in presenting a favorable financial position. Barjoyai suggests that if assets are valued above their actual realizable amount, the RAV will appear higher, potentially allowing dividend distributions above prudent levels.
He recommends independent valuation of high-value properties using consistent methods and clear market evidence. The RCI report also highlights that TH management relied on RAV calculations instead of market prices for listed shares and independent valuations of properties, leading to higher asset values without adjustments for market price declines.
Written by urgent.news from Malay Mail's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
