PM's Dept: If Tabung Haji practices prudent accounting, govt won’t need to take over assets at a premium

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KUALA LUMPUR (March 15): The non-performing assets held by Lembaga Tabung Haji (LTH) have been transferred to Urusharta Jamaah Sdn Bhd, which is wholly owned by the Ministry of Finance, at a hefty premium of RM9.9 billion for assets worth RM10 billion. 

The premium for the equity stakes in public-listed companies was as high as 36 times (please see list). The 29.8% stake in TH Heavy Engineering Bhd is an example. Urusharta Jamaah paid RM380.3 million for the block of 334.16 million shares, compared with its market value of RM10.02 million. 

The lowest premium is on the block of 65.51 million shares in MISC Bhd, which was transferred at RM486.53 million, or a 10.85% premium over its value of RM438.93 million at end-2018, according to the list attached to the written reply from Prime Minister Departments (PMD) to Dewan Rakyat yesterday.

PMD highlighted in the reply that if prudent accounting standard was practiced by LTH in the past, the pilgrim fund would have been able to continue holding onto these assets. 

Its reply said the assets acquired by Urusharta can be categorised into three types: properties, a non-listed company, and public listed securities.

Urusharta is a special purpose vehicle set up by the government to revive LTH’s financial health caused by the large deficit between its assets and liabilities. It is acquiring the pilgrims fund’s underperforming properties and equities in exchange for RM10 billion in non-tradable sukuk, and RM9.9 billion in Islamic redeemable convertible preference shares as part of its restructuring plan.

By exchanging its RM10 billion non-performing assets for RM19.9 billion worth of sukuk and Islamic redeemable convertible preference shares, it will help remove the pilgrim fund’s massive impairments on its assets.  

The restructuring plan will ensure the fund will be able to make hibah distributions according to the Tabung Haji Act 1995, said PMD.

PMD said overall, the assets transferred from LTH to the SPV comprises 29 properties, one company that is not public listed, and equity stake or derivatives in 106 public listed companies.

“If a prudent impairment rate has been practiced previously by the old management, not at 90% level, and the provision of impairment is made on the profit and loss statements in the past years, of course, LTH will be capable of continuing to hold all of these shares,” it added.

PMD pointed out that over the past few years, all of these equity losses were parked under ‘other reserves’ in LTH’s financial statements in order to continue showing high profit, and to ensure there were hibah payments every year. Consequently, this has resulted in the widening gap between its assets and liabilities.

PMD said based on LTH’s audited financial statements for 2017, ‘other reserves’ shows a negative value of RM4.6 billion.

Therefore, PMD said the government’s intention is to restore LTH’s financial position by taking over these losses to close the widening deficit.

PMD said Urusharta Jamaah’s role now is to implement rehabilitation for these assets through warehousing strategy and restructuring, while continuing the operations of the transferred assets to maximise their recovery value.

On top of that, PMD said Urusharta Jamaah will redeem all the financial instruments it issued and subscribed by LTH.

The issue of LTH's asset transfers was raised by Ahmad Amzad Mohamed @ Hashim (PAS-Kuala Terengganu) yesterday, who had asked the Prime Minister to state the value of each asset (equity and property) that has been transferred to Syarikat Urusharta Jamaah Sdn Bhd by LTH.

Properties

No. Info Type Book Value (RM'million) Transfer value (RM) Premium
1 Kuala Lipis, Pahang Land 0.003 0.080 2843.34%
2 Kuala Krai, Kelantan Commercial Building 0.312 0.650 108.01%
3 Kuala Perlis, Perlis Commercial Building 0.265 0.550 107.56%
4 TRX, KL Land 196.007 400.000 104.07%
5 Bandar Tasik Selatan,KL Commercial Building 1.080 1.800 66.67%
6 Johor Bahru,Johor Commercial Building 1.850 3.000 62.16%
7 Batu Pahat, Johor Commercial Building 0.330 0.502 51.97%
8 Jalan Tampin-Seremban,NS Commercial Building 0.850 1.292 51.97%
9 Kulim, Kedah Commercial Building 0.700 1.064 51.97%
10 Sg Petani, Kedah Commercial Building 0.655 0.995 51.97%
11 Greenhall, Penang Commercial Building 3.200 4.863 51.97%
12 Sandakan, Sabah Commercial Building 1.669 2.536 51.97%
13 Jalan Hill, NS Land 5.900 8.966 51.97%
14 TH Hotel Bayan Lepas Hotel 59.000 89.664 51.97%
15 TH Hotel Terengganu Hotel 88.000 133.736 51.97%
16 Precint 4, Putrajaya Land 91.580 139.177 51.97%
17 TH Hotel Kota Kinabalu Hotel 72.500 110.181 51.97%
18 Klebang, Melaka Land 48.000 72.947 51.97%
19 THHC Kuching Hotel Hotel 203.886 309.852 51.97%
20 TH Hotel Alor Setar Hotel & Office 105.693 160.626 51.97%
21 Kota Bharu, Kelantan Commercial Building 10.500 15.957 51.97%
22 Hicom-Glenmarie Factory Building 21.000 31.914 51.97%
23 Pekan, Pahang Commercial Building 1.990 3.024 51.97%
24 THHC Kuching Hotel Land 3.800 5.775 51.97%
25 Simpang Kuala, Kedah Commercial Building 4.600 6.991 51.97%
26 Raub, Pahang Commercial Building 1.375 2.090 51.97%
27 Gua Musang, Kelantan Commercial Building 0.650 0.988 51.97%
28 Segamat, Johor Land 0.040 0.061 51.97%
29 Platinum Park Commercial Building 485.811 737.400 51.79%

Non-listed Company

No. Info Type Book Value (RM'million) Transfer Value (RM'million) Premium
1 TH Estates (Holdings) Sdn Bhd Normal shares 713.708 796.468 11.60%
    RCPS 4.615 5.307 15.00%

Domestic equity securities

No. Info Shareholdings Market value at Dec 31, 2018 (RM'million) Transfer value/ investment cost (RM'million) Premium
1 TH Heavy Engineering Bhd 334,162,107 10.025 380.350 3694.06%
2 Scomi Energy Services Bhd 108,317,600 4.333 87.124 1910.84%
3 TH Heavy Engineering Bhd (ICPS) 1,097,228,735 16.458 315.453 1816.67%
4 Icon Offshore Bhd 103,611,268 7.253 139.003 1816.55%
5 YLI Holdings Bhd 9,312,300 1.909 30.575 1501.62%
6 Alam Maritime Resources Bhd 91,965,700 7.357 111.224 1411.76%
7 Bumi Armada Bhd (NS) 51,962,800 8.054 115.248 1330.90%
8 Parkson Holdings Bhd 105,908,219 25.948 331.646 1178.14%
9 Mudajaya Group Bhd 53,865,500 15.621 154.947 891.92%
10 Puncak Niaga Holdings Bhd 44,073,600 15.426 139.266 802.82%
11 Malaysia Marine & Heavy Engineering 105,619,000 57.562 443.875 671.12%
12 WTK Holdings Bhd 8,949,700 3.848 28.357 636.84%
13 NAIM Holdings Bhd 24,827,200 11.048 78.271 608.46%
14 Ikhmas Jaya Group Bhd 24,261,700 2.426 17.046 602.61%
15 Brahims Holdings Bhd 45,553,450 12.755 83.606 555.48%
16 Felda Global Ventures Holdings Bhd 283,710,100 202.853 1,310.021 545.80%
17 Adventa Bhd 14,335,900 6.236 38.787 521.97%
18 Sapura Energy Bhd 120,428,700 34.924 212.661 508.92%
19 Pelikan International Corp Bhd 157,185,498 54.229 329.490 507.59%
20 Petra Energy Bhd 31,707,012 12.841 64.699 403.83%
21 Dayang Enterprise Holdings Bhd 76,367,600 41.239 202.234 390.40%
22 Star Media Group Bhd 39,806,300 27.267 125.680 360.92%
23 Uzma Bhd 26,263,200 15.101 66.695 341.65%
24 Bonia Corp Bhd 18,749,300 4.125 17.755 330.45%
25 WZ Satu Bhd 43,498,672 8.265 33.214 301.88%
26 Velesto Energy Bhd 410,247,380 73.845 289.076 291.47%
27 TSR Capital Bhd 16,926,500 5.924 22.614 281.71%
28 Minda Global Bhd 55,040,000 3.027 11.007 263.61%
29 Integrated Logistic Bhd (NS) 20,584,783 9.572 34.647 261.96%
30 Lafarge Malaysia Bhd 13,450,100 24.345 83.867 244.50%
31 Gamuda-WE 139,124,600 20.869 69.562 233.33%
32 Ahmad Zaki Resources Bhd 21,766,700 6.639 21.777 228.02%
33 Lion Industries Corp Bhd 44,026,800 22.013 71.992 227.04%
34 Progressive Impact Corp Bhd 65,000,000 7.800 25.221 223.35%
35 Mitrajaya Holdings Bhd 17,506,710 4.902 15.801 222.36%
36 Datasonic Group Bhd 124,153,400 50.282 159.154 216.52%
37 MMC Corp Bhd 233,819,700 194.070 583.463 200.65%
38 Titijaya Land Bhd 34,512,000 10.354 31.116 200.54%
39 WCT Holdings Bhd 118,655,900 80.093 240.692 200.52%
40 Fajarbaru Builder Group Bhd 5,908,600 1.861 5.575 199.52%
41 Econpile Holdings Bhd 27,169,650 10.460 31.146 197.76%
42 Destini Bhd 53,354,000 10.938 31.607 188.97%
43 POS Malaysia Bhd 7,218,400 12.416 35.038 182.20%
44 Melati Ehsan Holdings Bhd 8,612,900 4.522 12.468 175.73%
45 UEM Sunrise Bhd 348,871,500 232.000 624.513 169.19%
46 Ann Joo Resources Bhd 19,102,000 23.878 62.839 163.17%
47 Wah Seong Corp Bhd 15,733,700 9.991 25.935 159.58%
48 Yi-Lai Bhd 16,480,000 9.229 23.678 156.56%
49 Symphony Life Bhd 22,609,000 7.461 18.962 154.14%
50 Eversendai Corp Bhd (NS) 40,285,600 26.991 66.484 146.32%
51 Titijaya Land Bhd (ICPS) 4,000,000 0.140 0.330 135.71%
52 Reach Energy Bhd 106,480,800 31.412 72.552 130.97%
53 Glomac Bhd 80,060,310 31.224 71.823 130.03%
54 Gadang Holdings Bhd 33,829,500 17.253 39.108 126.67%
55 Malakoff Corp Bhd 500,000,000 400.000 901.984 125.50%
56 Telekom Malaysia Bhd 40,470,000 107.650 241.203 124.06%
57 Ntion Vtex Bhd 17,334,003 10.487 23.445 123.56%
58 Gamuda Holdings Bhd 90,495,000 206.238 452.528 119.42%
59 MK Land Holdings Bhd 31,526,500 5.675 12.372 118.01%
60 Ekovest Bhd 33,558,000 14.933 32.377 116.81%
61 TSH Resources Bhd 61,350,200 60.737 131.157 115.94%
62 IJM Corp Bhd 227,307,500 368.238 773.965 110.18%
63 Kimlun Corp Bhd 12,112,500 13.082 27.115 107.28%
64 Hiap Teck Venture Bhd 22,587,200 5.082 10.503 106.67%
65 Land & General (NS) 126,094,540 17.023 34.717 103.94%
66 Rimbunan Sawit Bhd 2,210,400 0.343 0.697 103.31%
67 Pharmaniaga Bhd 11,586,700 32.211 63.086 95.85%
68 CSC Steel Holdings Bhd 27,281,800 27.827 54.228 94.87%
69 MSM Malaysia Holdings Bhd 35,000,000 91.000 174.137 91.36%
70 Boustead Heavy Industries Corp 18,646,300 24.427 46.600 90.78%
71 APB Resources Bhd 8,850,300 7.169 13.663 90.59%
72 Sarawak Plantation Bhd 18,791,400 31.945 59.177 85.25%
73 Velesto-WA 69,066,620 4.489 8.288 84.62%
74 AZRB-WA 14,433,400 1.443 2.598 80.00%
75 Hiaptek-LA RCUIDS 20,005,360 5.501 9.900 79.96%
76 Enra Group Bhd 5,000,000 8.100 14.509 79.12%
77 Mah Sing Group Bhd 139,994,900 128.095 227.172 77.35%
78 Eastern & Oriental Bhd 94,248,000 105.558 182.022 72.44%
79 MCT Bhd 133,480,000 99.443 170.854 71.81%
80 KSL Holdings Bhd 71,800,000 50.978 87.486 71.62%
81 Zhulian Corp Bhd 17,948,700 22.131 37.394 68.97%
82 YTL Power International (NS) 49,017,630 40.685 68.485 68.33%
83 Amway (M) Holdings Bhd 204,000 1.224 2.033 66.13%
84 Pintaras Jaya Bhd 11,352,100 25.315 41.767 64.99%
85 REACH-WA 38,307,200 2.682 4.405 64.29%
86 MY EG Services Bhd 11,761,300 11.467 18.561 61.86%
87 Hap Seng Plantations Bhd 66,074,500 108.362 173.844 60.43%
88 DSONIC-WA 62,076,700 4.656 7.449 60.00%
89 Boustead Plantations Bhd 75,389,100 56.542 88.989 57.39%
90 Globetronics Technology Bhd 9,000,000 15.750 24.525 55.71%
91 Axiata Group Bhd 237,100,065 931.803 1,422.605 52.67%
92 TRC Synergy Bhd 34,834,952 18.811 28.043 49.08%
93 SKP Resources Bhd 19,986,500 20.986 30.819 46.86%
94 Bintulu Port Holdings 17,000,000 76.500 111.873 46.24%
95 Suria Capital Holdings Bhd 26,800,000 44.220 64.519 45.90%
96 Lingkaran Trans Kota Holdings 16,754,100 69.530 96.410 38.66%
97 White Horse Bhd 22,468,700 34.377 47.381 37.83%
98 Lotte Chemical Titan Holdings Bhd 57,672,100 266.445 365.227 37.07%
99 SP Setia Bhd 71,799,700 167.293 228.693 36.70%
100 MRCB-WB 69,935,500 14.337 18.883 31.71%
101 Maxis Bhd 128,503,600 681.198 879.396 29.10%
102 UEM Edgenta Bhd 48,313,300 131.412 156.929 19.42%
103 UMW Holdings 22,760,300 124.499 148.353 19.16%
104 Sime Darby Plantation Bhd 59,363,900 282.572 327.131 15.77%
105 DiGi.Com Bhd 112,332,500 500.329 576.241 15.17%
106 MISC Bhd 65,511,300 438.926 486.532 10.85%