This article first appeared in The Edge Malaysia Weekly on December 10, 2018 - December 16, 2018

SIX years on, Lembaga Tabung Haji (TH) has yet to receive the full payment of US$910 million from the sale of its 95% stake in Indonesian company PT TH Indo Plantations (THIP) to PT Borneo Pacific in 2012.

According to sources, TH obtained “far less” than what it should have from PT Borneo — an unlisted company controlled by Indonesian businessman Alexander Thaslim at the time — even after giving discounts.

In 2012, the deal was reported to be one of Asia’s largest in the sector in several years.

THIP owns 83,000ha of oil palm estates in Indonesia. Little is known about PT Borneo — a coal trader and miner that also holds oil palm companies — or Thaslim.

In a police report lodged by TH on Nov 30 that was sighted by The Edge, TH accuses Tan Sri Ismee Ismail (its former CEO), Hazlina Mohd Khalid (legal adviser) and Rifina Md Ariff (senior general manager of corporate services and real estate) of various misrepresentations and withholding material information, which resulted in a financial loss to the pilgrim fund.

Firstly, it claims that whenever the board agreed to give PT Borneo an extension of time for payment, it could have easily terminated the conditional sales and purchase agreement (CSPA) and forfeited PT Borneo’s earnest deposit of US$18.2 million. However, it alleges, Ismee concealed this fact from the board on a number of occasions.

And despite the many extensions given, the rest of the purchase price was still not paid.

Secondly, TH claims that despite not being paid in full, Ismee, at a board meeting on Feb 10, 2014, recommended that the board transfer all of THIP’s shares to a nominee of PT Borneo, namely PT Nusa Prima Energi. TH alleges that Ismee, Rifina and Hazlina did not disclose that doing so would relinquish TH’s rights over THIP’s shares. The shares were subsequently transferred to PT Nusa as recommended.

This caused its subsidiaries that hold THIP — TH Indopalms Sdn Bhd and TH Indo Industries Sdn Bhd — to suffer losses “amounting to the earnest deposit of US$18.2 million or the balance of the purchase price remaining due and owing of RM11,650,105”.

Thirdly, TH claims that it paid a redemption sum to Maybank Islamic Bhd, when legally, it should have been paid by PT Borneo. Under the CSPA, the redemption sum owed to Maybank Islamic under a financing agreement dated March 25, 2011, would be paid by the purchaser — that is PT Borneo. However, TH says the board was notified by Ismee that TH would have to ratify the advance of US$178.6 million given to THIP for the redemption of the Maybank Islamic facility on behalf of PT Borneo.

It alleges that there was no prior approval by TH for the advance and that there was concealment of material information that failure to redeem by PT Borneo would be tantamount to material breach of the CSPA, which would, in turn, entitle TH to terminate the agreement.

Fourthly, TH alleges that there was false representation of a deadline payment. During a board meeting on Dec 12, 2012, Ismee told TH that the payment of US$81.8 million could be paid on March 31, 2013, when the sum was actually contractually due on Dec 14 , 2012. The CSPA obliged PT Borneo to pay US$81.8 million on Dec 14, 2012, the failure of which would entitle TH to forfeit the earnest deposit of US$18.2 million.

TH says that separately in a board meeting on April 9, 2014, Ismee stated that a sum of US$280 million had been paid to THIP when in fact there was no confirmation that such a sum was received.

Yayasan Tabung Haji and Trurich

Separately, TH also filed a police report alleging that RM22 million from Yayasan Tabung Haji’s 2017 programme was spent on activities with political inclinations, which contravened the memorandum and articles of association of the charitable entity. TH had contributed RM7 million to the programme that was meant for “asnaf” or the poor and needy.

Its trustees then were former TH chairman Datuk Seri Abdul Azeez Abdul Rahim, Ismee, former CEO Datuk Seri Johan Abdullah, chief operating officer Datuk Adi Azuan and chief financial officer Datuk Rozaida Omar.

In the Nov 30 police report, TH says Yayasan Tabung Haji’s management had instructed that excess monies from the programme be returned to the latter’s bank accounts. However, it was found that several TH branches handed the excess monies meant for asnaf “to representatives of a political party”.

Abdul Azeez, when met by the press last week, described the police reports as “malicious” and meant to humiliate him. He agreed that TH had contributed the RM7 million.  “[But] the rest came from various sources,” he claims. “None of it came from [TH’s] depositors ... we cannot withdraw the money from them.”

Another past TH deal that may attract attention is its 52% stake in loss-making Trurich Resources Sdn Bhd, which owns 42,000ha of oil palm plantations in Indonesia.

TH and FGV Holdings Bhd jointly bought Trurich for RM600 million in 2009 and assumed debts of over RM700 million, The Edge Financial Daily reported last Friday. Citing sources, it said the two will likely have to write down their investments and police reports are expected to be lodged as well.

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