If TH has to liquidate assets -- including selling shares -- it may cause panic across the stock market.
KUALA LUMPUR: It’s said that just five per cent of depositors control 75 per cent of the RM57.9 billion funds in Tabung Haji (TH), noted a political analyst in his latest blog posting in OutSyedTheBox. “This means that the five per cent of depositors control RM43.4 billion of TH’s RM57.9 billion deposits.”
The RM43.4 billion comes from big-time investors, institutions which are not saving money to perform the pilgrimage in Mecca, pointed out Syed Akbar Ali the analyst. “These institutional investors are looking for financial returns on investments.”
So, he added, if TH cannot declare dividends or it has “no money” to pay dividends, then logically these institutional investors should withdraw their RM43.4 billion. “That means the deposits will shrink to only RM14.5 billion.”
Again, asked the analyst, if TH does not have money to pay dividends this year, will it have enough cash to refund RM43.4 billion of the depositors money, if they decide to exit. “How will TH convince the remaining 95 per cent, makciks and pakciks, not to withdraw their RM14.5 billion?”
“If TH has to liquidate assets — including selling shares — it may cause panic across the stock market.”
Many of the shares in which TH has invested are also held by other GLC funds like ASB, ASN, KWAP, EPF, and LTAT, among others, he stressed. “So, if TH sells its shareholdings in a hurry and prices plunge, then all the other GLC funds will also suffer losses.”
He was commenting on a blog posting, that “someone” sent him. “It’s obviously some insider blog — or Deep Throat — from TH who wishes to expose the goings-on at the institution.”
First of all, he said, the guys behind blog should upload what they have before MCMC most likely blocks the blog as well.
Secondly, he said, Bank Negara Governor Zeti Akhtar Aziz should make a public statement on the situation at TH. “TH made ‘untung’ (profit) of RM2.98 billion in 2014 but paid out dividends of RM3.3 billion last year. “How can TH pay out dividends more than their ‘untung’ by dipping into reserves?”
Bank Negara, as the regulator, should assure the public that TH was not like a pyramid or Ponzi scheme, said Syed. “Bank Negara was said to have written on 23 December 2015 to the minister in charge of TH to underline that the institution paid dividends at 107 per cent of untung.”
Furthermore, said the analyst, it’s said Bank Negara advised the Minister that since TH’s assets position was less than their liabilities, then by Law, under the Tabung Haji Act, it cannot declare any dividends.”
“That’s why the blog posting claims that thus far, 22 January 2016 the time of writing, no dividend had been declared by TH.”
Bank Negara as the Regulator has a duty to advise the public, which has invested RM57.9 billion with TH, about the real situation inside TH, reiterated the analyst. “Since all moneys deposited with TH are guaranteed by the government, it means that all Malaysian taxpayers are ultimately burdened with any financial miscarriages that may happen in TH.”
So, argued Syed, elegant silence was not an option for Bank Negara. “The people should start raising their concerns on the matter.”
“This is a real mess that’s happening.”
Bank Negara has to say something, said the analyst.
Even if the new Bank Negara Governor was going to be from TH, lamented Syed, it still does not solve the problem.