(May 12): Perak DAP today lodged a police report against Lembaga Tabung Haji to for mismanagement and abuse of power following the fund's move to sell a piece of land it just bought from 1Malaysia Development Bhd (1MDB).

Perak DAP Socialist Youth (Dapsy) secretary Howard Lee, said Tabung Haji should have acted in the interest of its depositors and not because Prime Minister Datuk Seri Najib Razak advised it to dispose of the land.

Najib is also Finance Minister and chairman of 1MDB's advisory board.

"The question is did Tabung Haji follow the proper procedures before vetting the sale of the land, which as admitted by the chairman himself, was in following Najib's advice.

"It also begs the question whether the purchase of the land from 1MDB was also made based on Najib's advice instead of Tabung Haji stakeholders," Lee said after lodging the police report at the Ipoh district police station today.

Tabung Haji chairman Datuk Seri Abdul Azeez Abdul Rahim had announced at a press conference last week, that the pilgrims' fund had been advised by Najib to sell the land at the Tun Razak Exchange (TRX) project in order to respect the "sensitivity" of Tabung Haji depositors.

It had bought the 0.63ha land from 1MDB for RM188.5 million, or RM2,773 per square feet (psf), compared to the RM64 psf 1MDB had paid when it bought the land from the federal government four years ago.

Azeez said Najib had advised him to dispose of the land so that the fund's reputation would not be "tarnished" due to its business transaction with 1MDB.

Perak DAP economic development bureau chief Chong Zhemin said the report was also lodged for police to investigate the purchase transaction of the land, bought by Tabung Haji for RM188.5 million, which was 43 times higher than what 1MDB had paid the federal government for it four years ago.

"The price increased 43 times in a span of four years. Why did Tabung Haji overpay for the land?”

He added that the transaction warranted investigation as it came at a time when 1MDB was in need of cash for interest repayment.

"Najib denies this is a bailout but it is clearly so since the transaction is also in cash and did not involve bank loans.”

Chong said additional facts that prompted the report include the statement by Minister in the Prime Minister’s Department Datuk Dr Wee Ka Siong, that Tabung Haji's purchase of the 1MDB land was never discussed in Cabinet and Tabung Haji's RM920.8 million investment in 1MDB’s Bandar Malaysia sukuk issuance back in February last year.

"Since the Cabinet was in the dark, according to Wee, that means Najib made decisions in his own capacity.

This is abuse of power, we want him to step down as prime minister as he has failed the people.”

Meanwhile, retired judge, Datuk Gopal Sri Ram had also criticised Tabung Haji for acting based on Najib's advice, saying the fund's board should act independently.

He said the directors of a company or institution were by law required to be independent and to act in the best interests of their organisation.

"They should not act upon the dictation of a third party but let the board decide.

"If they do so and the institution suffers a loss, they will be personally liable," the former Federal Court judge told The Malaysian Insider.

The issue of corporate independence and political conflict of interest was also highlighted by anti-graft watchdog, the Centre to Combat Corruption and Cronyism.

It said that there was not only corporate conflict of interest in the deal, but also political interests as Azeez himself, besides other Tabung Haji board members, were leaders in Umno, the ruling Malay party of which Najib is president.

Tabung Haji has said that it stood to make at least RM5 million in profit by selling the 0.63ha plot in the Tun Razak Exchange project, a proposed new financial district of which 1MDB is the master developer.

The pilgrims fund's purchase of the land in April was leaked last week and caused an uproar with depositors, whose savings with the fund are used to help them perform the Muslim haj, or pilgrimage in Mecca.

The deal was also severely criticised by leaders from both sides of the political divide, given that 1MDB has a RM42 billion debt, leading to speculation that the buy was a form of bailout for the government-owned investment firm that is due to service its interest payments. – The Malaysian Insider