TH RCI findings mirror FGV case, says PMO adviser

Prime Minister's Office economic adviser Nurhisham Hussein stated that the Royal Commission of Inquiry (RCI) findings concerning the Lembaga Tabung Haji (TH) echo the FGV Holdings Bhd case. He highlighted the similarity between the two, noting that they both revolved around investment issues. Both involved assets acquired without proper guarantees, at inflated prices, and without adequate due diligence, suggesting a similar pattern of financial mismanagement.

The TH case, like FGV, saw the government allocate significant annual funds, with FGV facing almost RM1 billion in annual allocations and TH's financial issues coming to light in July when Anwar Ibrahim mentioned losses of nearly RM10 billion due to mismanagement and political interference. Some depositors questioned whether the government could shoulder the burden following the RCI's findings of financial mismanagement at TH.

Nurhisham emphasized that Malaysia has never defaulted on its financial obligations, asserting that the government has always made payments. The issuance of RM11.5 billion in sukuk by TH was not a bailout but a refinancing exercise to provide the institution with a more sustainable cash flow. This new sukuk replaced earlier ones, which were zero-coupon, meaning TH did not receive annual returns.

The government bears the financial risk for these sukuk, depending on the value of assets managed by the previous entity, Urusharta Jamaah Sdn Bhd (UJSB). If UJSB fails to realize the full value of its assets, the government will still fulfill its obligations under the Tabung Haji Act to safeguard depositors' funds.