Peluang TH pulih award 899 juta riyal Al-Rawda rendah, kata pakar

An expert from UiTM's Management and Business Management Department, Iqbal Noor, believes there is a low chance that the Tabung Haji (TH) will fully recover the full 899 million riyal (approximately RM978 million) award it is seeking from Al-Rawda Real Estates Development & Project Management Co Ltd. According to Noor, the success of regaining the remaining amount largely depends on Al-Rawda's ability to prove and strengthen their assets to fulfill the award.

Out of the demanded award amount, only 14.9 million riyal (about 1.7%) has been accepted so far, with the rest depending on Al-Rawda's and related parties' ability to fulfill the award. In high-value transactions, investors typically require strong financial protection such as asset valuation and bank guarantees, while personal guarantees act as additional safeguards.

If a transaction proceeds without bank guarantees and the assessment process is incomplete, it may indicate weak governance and investment decision-making processes. Financial governance issues are not solely about profit or loss, but whether risks were identified, assessed, and appropriately considered before investment decisions were made.

For foreign investment management, Noor suggests that the standard operating procedures for government-linked investment companies (GLIC) should establish step-by-step risk assessment processes before investments are approved. This includes evaluating aspects such as risk, legal, and commercial factors before funds are disbursed, with the receiving company needing to provide guarantees from strong financial institutions or asset-backed guarantees.

Disbursement of funds should be made progressively based on performance milestones. Any exceptions to the requirements should go through a higher approval level with clear justification recorded. The TH's financial situation regarding the Al-Rawda investment, with a full value loss of RM1 billion recorded in 2024, shows the TH has taken a conservative approach by considering the potential loss on the assets.

However, Noor notes that a full value decline does not mean the TH should stop efforts to recover the claim, as long as there is a possibility of recovering and strengthening the assets. Currently, the TH's approach can be considered reasonable, as it does not assume the full amount will be accepted but continues to try and recover as much as possible by pressuring and strengthening the recoverable assets.

Noor believes the government should create a clear and robust risk assessment mechanism to strengthen the investment assessment process in the increasingly complex financial environment. However, this mechanism does not necessarily require the establishment of a new agency. A more rigorous, independent, and integrity-based risk assessment mechanism is crucial to reducing investment risks, especially for large cross-border transactions. Assessors should also have expertise in finance, international law, and related industries.