Tuesday, January 26, 2016

Be firm on latest "bank run" attempt on LUTH


Last Friday, an unnamed black blog appeared to make allegations that Lembaga Urusan Tabung Haji (LUTH) is unable to make dividend payment due to some financial constraint faced.

No specifics were given till a later posting revealed two letters from Bank Negara Malaysia's Governor, Tan Sri Dr Zeti Akhtar Aziz to Minister, Dato Jamil Khir and another to LUTH Chairman, Dato Azeez Raheem with cc to CEO Tan Sri Ismee Ismail.

Judging from the letter produced, it looks to be a usual Bank Negara cautionary letter to LUTH Minister in charge and management. The letter will not be reproduced for fear of breaking BAFIA. Proceed to Outsyed the Box if the postings still not taken off. [The explanatory reply from MyKMU is here].

In what looks like a collaboration to release the sensitive letter in the black blog and subsequently being given publicity and commentary by Dato Abdul Kadir Jasin and Syed Akbar in their blogs, the modus operandi is similar to the blietzkrieg against LUTH on the TRX land many months ago.

Maybe the same set of players are unhappy that LUTH did not follow their expected outcome to sell the land. Possibly the latest effort is to divert attention from the leadership crisis in Kedah and maintain the pressure to revive the dying 1MDB and donation issue.

Co-incidently, AG said today no criminal offense was done on receiving Saudi donation. It tallies with a comment by one adviser to MACC that saw the IP and conclude no criminal intent or offense done. Also disclosed the money was returned to the Saudi.

The current episode raises concern on information leakage happening in government, enforcement authorities and public institutions.

It was the piecemeal leakages by Xavier Justo, players like Clare Brown, WSJ, Tony Pua, etc., and even possibly authorities involved in the investigation that led to the uproar and presumption crime was committed and major hanky panky done in 1MDB.

Thus far no proof has been revealed by critics and detractors of Dato Najib. Authorities too have not found anything wrong done. Bank Negara Governor, Zeti have had a change in attitude as per her CNBC interview recently.  

There have been various leakages on LUTH investments before, which showed possibility that leakage could have happenned from LUTH side, maybe at a certain management level or possibly at the Board of Directors level.

On this latest leakage, it could still come from LUTH but it cannot be discounted that it could have come from Bank Negara.

A source once revealed that Bank Negara could have leaked some of the 1MDB and political donation related documents at WSJ but no proofs available to substantiate.

If the latest leak had come from Bank Negara, it would be sad state of affair. Bank Negara documents and letter are confidential and governed by secrecy under BAFIA but within the authority in charge of BAFIA itself, there are leakages. No accusations but mere concerns.

LUTH and Bank Negara should look at this episode seriously. Such letters leaked and manipulated could cause a "bank run" on LUTH. The panic initiated by the two bloggers and one suspiciously known anonymous blogger could lead into such consequence, as planned or by accident.

It could eventually destroy an important and respectable Islamic institution. Once destroyed, it is difficult to resurrect.

Syed Akbar, who profess to Islam Liberal beliefs, may be against the existence of Institutional Islam but consider the almost 9 million depositers saving money to make their Haj.

LUTH is one of the best saving mechanism for that purpose. Its attractive scheme even attract high networth individuals saving in the millions of ringgit in LUTH.

So such collaboration to instill fear into the naive smaller depositors should not be taken lightly but with a serious and firm hand. More so it is the second such attempt to instill fear. Two consecutive exercises within a short span of time could be devastating.

One of the blogger make no bone about giving "idea" to small depositors to take their money out. This outright economic sabotage is a negative Keling trait which spoil the good name of Keling.

Police and MCMC should be notified and investigation carried out immediately. Hauled up whoever need hauling.    

14 comments:

roslan othman said...

No need to make lousy analysis, because a lot of way to cover up ,see after this the Najib tamby will come out and say all ok we give out dividen but of cause all will come from government coffer that's a tax payer money .

Anonymous said...

I doubt the Police or SPRM can do anything anymore. Both are alreday compromised and results of any investigation will have no credibility in the present circumstances. I am sad because I have some savings in TH and I don't know what is going to happen to my money.

Many other depositors I know are equally despondent over these recent developments.

Anonymous said...

So the spread is truth?

Anonymous said...
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Anonymous said...

What do you expect when their agenda are to destroy DSN. This Syed akhbar trying very hard to teach how to run a country. He think he's the smartest guy to be finance minister. The rest of DSN he put as moron and stupid. Any how this letter which the content comes from BNM intend to discredit Ismee since his name prop up as BNM governor after Zeti. The CIO of TH is a cambridge alma mater and have been CIO in top investment institutions in Malaysia and oversea. The Corporate finance comes from investment banking. Do you all think they're all bunch of idiots.

Anonymous said...
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Anonymous said...

Assuming that the leak of BNM letters to Tabung Haji is real, these are the facts:

1) BNM is concerned that TH's assets as at Sept 2015 is lower than the amount of liabilities (meaning deposits by the depositors) due to weaker stock market performance.

The letter expresses BNM's worries to TH that it needs to increase its reserves and strengthen its risk management.

It is not a letter to penalize TH.

2) BNM believes that the total assets of TH as at Sept is only enough to pay 98sen for each RM1 of deposits. This means that there is RM56.72b worth of assets to cover RM57.9 billion of deposits - a shortfall of RM1.158b.

3) BNM says the reason for this shortfall is because between 2012 to 2014, TH depleted their reserves by paying more dividends than their profits - meaning paying RM1.07 for each RM1 of profit.

This does not mean that the reserve money has gone missing but rather it has been used to more generously pay the depositors.

4) It is likely that the Sept 2015 asset values used by BNM does not take into account revaluation of real estate assets as well as exchange rates - especially foreign real estate.

As a general rule TH invests 50% in Bursa,, 20% fixed income, 20% Real Estate and 10% money market.

Despite heavy criticism then, since 2013 TH had invested heavily in overseas real estate.

With the appreciation in foreign real estate and the weakening of the Ringgit, TH had recently said that it had made 200% returns on its property investment in UK recently, http://www.nst.com.my/news/2015/12/115908/back-basics-tabung-haji

TH is sitting on substantial potential revaluation gains that they will have to recognize at end Dec 2015.

Continued

Anonymous said...

Continuation


Also, the Bursa index at end Sept was 1600 points but at end 2015, it closed slightly below 1700 points - this means that valuation of TH's equities investment at end financial year 2015 would likely be higher.

In 2014, it had paid dividends and bonus of 8% totaling RM3.2b - the highest in 14 years.

Thus to pay a similar 8% dividends and make up its Sept shortfall , TH would need a valuation increase from Sept to Dec 2015 of abut RM4.6 billion - or about 8% increase from the RM56.72b assets in Sept - which is not impossible.

But whatever it is, TH deposits are protected by government so there will be no loss.to depositors.

However due to overall weaker economy in 2015, expecting a similar 8% dividend would be very optimistic

For example, in the last recession years of 2008-2009, the dividend was only 5% while in the years of 2001 to 2004, the total dividends were only between 3.25% to 4.3% only.

Anyway, TH Chairman had already said today that TH will have no problems being profitable and paying dividends for last year and to wait for the official dividend announcements - so let's wait.

The timing of the leak of these letters seemed to suggest an attack on TH Chairman and MP for Baling who is allegedly playing a part in the Kedah MB crisis.

ex banker said...

Do you need to be profitable, to pay dividends? Dividend cannot be paid from reserves?

TH can afford to dish out dividends, so WTF should bnm and the anarchistic bloggers bother about reserve and all that nonsence.

BNM shd know better than apply banking and trust fund standard on business conglomorate like tabung haji.

If they need to match liabilities, then pay low divideng saje lah. When that happens, these bloggers will turnaround to make an issue of low dividend and inplicate 1mdb.

All this is a politically motivated sinister move by kadir jasin, syedakbar dan highly likely firdaus abdullah is behind theblack blog.

Anonymous said...

Its no wonder the EX BAnker is an EX banker!

RD. said...

Dear ABITW.

Out of 8.8 million depositors, 5% of them holds 75% of the total RM58 billion deposit, collected by TH.
Therefore, same as in ASB, ASD...etc., there are people with tons of cash, deposited their money in TH, risk-free, without the intention of going for the Haj. Infact, these can go for Umrah, as much as they want, anytime.
If the makcik & pakchik withdraw their saving, TH would not be effected at all. It's those 'Orang-kaya-banyak-duit' that TH should be worry about.
And this is where, top people in TH, especially the politicians play a part. Who knows, those 5% depositors might have 'strong-cable' with them. That itself explain why TH have been paying 107% from its profits, 2012~2014.

Anonymous said...

you have to asked why is there so many leakages. the only reason is because the people no longer believe in the system. if people believe in the governance, check and balance and rule of law; not many leakages will happen cause the system will eventually be put in place.

there will be a mechanism which will eventually put the wrong doer to be prosecuted.

but how can anyone believe the system anymore when, after the new AG was appointed his decisions was glaringly against the norm:
1. rejected the investigation by BNM on 1MDB
2. free the Budu man from cowgate
3. rejected SPRM's investigation on Najib

any thinking person won't buy the reasoning given by AG. Cash is only king for the people who have no moral and integrity; let alone to buy loyalty from Allah fearing person.

Assalamualaikum.

Ayam said...
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Anonymous said...

anon 9:42 PM
I agree with u..
moron is just perfect..
to cap it. stupid & idiot best describe them too..
don't you think so..?
think bro.. think..unless..hmmm

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