KUALA LUMPUR (Feb 27): The government's plan to return Lembaga Tabung Haji's assets that it acquired at a premium from the pilgrim fund in 2018 "is still in early stages" said Minister in the Prime Minister’s Department (Religious Matters) Datuk Mohd Na’im Mokhtar.

The government is still looking into the matter considering the “huge gap” between the actual value of the assets now and the value pegged to them when Urusharta Jamaah Sdn Bhd (UJSB) — a special purpose vehicle (SPV) set up under the Ministry of Finance (MOF) — took over the assets, the minister said in a parliamentary reply on Tuesday.

UJSB paid RM19.9 billion to TH to take over the assets, which were underperforming and worth about RM9.7 billion at the time. Of the amount it paid, RM19.6 billion was raised via two sukuk issued in 2019, while RM300 million was paid in cash, according to the Auditor-General's Report.

“As there is still a huge gap between the value [pegged to the] asset transfer and its current value, the government is looking at the best solution to benefit all parties,” Na’im said.

The interests of both TH depositors and the government need to be protected in addressing the matter, he said.

“A special internal committee in TH has been established and has started discussions with MOF regarding the takeover of the assets,” the minister said, adding TH is in the process of getting the list of transferred assets that are still under UJSB’s holdings.

The asset transfer was done to address TH’s net liability position, which left it unable to pay distributions to its contributors. TH’s net liabilities stood at RM10 billion at end-2018 if the transfer of assets did not happen.

The Prime Minister's Department had previously said back in 2019 that the government would not have to take over those assets from TH if the pilgrim fund had practised prudent accounting standards.

UJSB was given a 10-year mandate to rehabilitate the assets. Among the assets transferred to UJSB were four TH hotels: TH Hotel Kota Kinabalu, TH Hotel Bayan Lepas, TH Hotel and Convention Centre Alor Setar, and TH Hotel and Convention Centre Kuala Terengganu, all of which had been renamed Raia Hotel.

It is understood that the government had also considered annual cash injection into UJSB to help the SPV rehabilitate the assets it took over.

Last September, Prime Minister Datuk Seri Anwar Ibrahim said MOF will initiate discussions for the assets to be transferred back to TH, “once TH is well-managed and secure”.

As at end-2022, TH had net assets of RM1.37 billion. UJSB, on the other hand, had total assets of RM9.057 billion at end-2022.

This has significantly improved to RM9.71 billion at end-2023, with investment net asset value of RM7.77 billion, a spokesperson for UJSB told The Edge in a statement.

"Property value is still picking up as we try to maximise recovery value," the statement said.

The SPV has redeemed RM400 million of the RM19.6 billion sukuk it issued. Based on the outstanding sum of RM19.2 billion, the gap between the assets UJSB holds and the sukuk amounted to RM9.49 billion, back-of-the-envelope calculations showed.

Meanwhile, neither UJSB nor the MOF has announced the appointment of a new CEO for the SPV, which has had two CEOs since its inception in 2018. Its last CEO Farouk Kamal resigned in January to move to AirAsia as its deputy group CEO (corporate).

In the meantime, UJSB's chief investment officer Mohamed Fairuz Kamilan has been appointed the interim CEO.