Tuesday 05 Dec 2023
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DON'T politicise Tabung Haji

The appointment of Baling member of parliament Datuk Abdul Azeez Abdul Rahim as the chairman of Lembaga Tabung Haji has raised eyebrows because such positions are not normally given to those active in the political world.

Azeez, an elected member of the Umno supreme council and the founder of Kelab Putera 1Malaysia, has headed relief missions to war-torn countries or those hit by natural calamities. Last year, he and his team were in Japan to offer their assistance after an earthquake hit the country and triggered a tsunami.

Although Azeez has been a board member of Tabung Haji for the last two years and sits on the boards of two of its companies, he does not come with strong corporate finance credentials.

Helming Tabung Haji, which manages RM35 billion of funds, is no easy feat. It used to have ex-politicians as its chairman but stopped that practice in early 2000.

The last of the ex-politicians to head Tabung Haji was the late Tan Sri Ahmad Razali Mohamed Ali, the former Selangor Menteri Besar whose term ended after the fund undertook a massive clean-up of its investments.

Datuk Mohd Bakke Salleh who now heads Sime Darby Bhd, was appointed CEO in 2001. Tabung Haji's 16 subsidiaries were trimmed to four.

Midway through Bakke's tenure, ex-civil servant Tan Sri Zainol Mahmood was appointed the chairman. He was later replaced by Tan Sri Abi Musa Asa'ari Mohamed Nor.

After Bakke left for Felda Holdings Bhd, Datuk Ismee Ismail took over as CEO.

Since the clean-up in 2001, Tabung Haji has had politicians as board members, but not as chairman or any other key posts. Why change now?

Is replacing the EO the solution?

To what level must crime rise before something is done about it? It is clear from news reports that this is already affecting businesses and tourism.

In early July, it was reported that a clinic — yes, where the sick go to get well — was ambushed by robbers. Armed guards now watch over diners in restaurants to ensure their safety. According to anecdotes, restaurants, including the 24-hour eateries, are closing early out of fear of being robbed.

Surely, this will have an adverse effect on Malaysia as a tourist destination? Not many would want to holiday in a country where crime is rampant and personal safety is not assured.

Many headhunters will say it has become even harder for them to attract foreign talent or even locals to return, given the rampant crime.

The rising crime rate is no longer just a perception but a reality for many Malaysians. When a minister's home was broken into, it made the headlines but the fact is that the fear of becoming a victim of street crime is something Malaysians live with every day.

There are those who claim the rising incidence of crime is due to the repeal of the Emergency Ordinance (EO), which had allowed the detention of suspected criminals for years without trial.

However, has any study been done to back such claims? Did all of the reportedly more than 2,000 detainees released after the repeal of the EO go back to crime as claimed? Is it not possible to track down some of these "hardcore criminals"?

Now, new laws will replace the EO due to the increase in criminal activity. But is it really that simple?

Will the new laws deal with the problem of crime and respect basic human rights?

While Malaysians are clearly alarmed by the wave of crime, there must be a conscious need to not impinge on an individual's rights.

No certainty in profit guarantee

The listing of Artwright Holdings Bhd, which is now known as AHB Holdings Bhd, in 1996 came with a profit guarantee from the controlling shareholders.

It was put in place to protect shareholders' interests and ensure the company had some form of commitment from the promoters.

Indeed, the manufacturer of office furniture did well in FY1997 ended June 30, surpassing the profit guarantee. But it could not meet its target after it was hit hard by the 1997/98 Asian financial crisis. Hence, there was a shortfall of RM11.49 million (net of tax), which was supposed to have come from the promoters. But this did not happen.

Only 15 years later have the guarantors found a solution.

AHB found a third party — Dexx Technologies Sdn Bhd — to take over its trade debts of RM17.87 million. In return, the amount due to AHB in the form of profit guarantee was cancelled.

This brings into question the purpose of having a profit guarantee clause in corporate exercises.

Will the minorities be able to impose on the major shareholders or promoters if the profit guarantee is not met?

At the moment, a profit guarantee is no longer required for companies going for listing. But such clauses are still part and parcel of corporate exercises — for example, mergers or reverse takeovers.

The regulators have tightened profit guarantee clauses, for instance by imposing moratoriums on shares. But moving forward, they should be tightened further to ensure that the obligations are met through only cash payments and not by getting a third party to take over the debts of the company.

This story first appeared in The Edge weekly edition of July 8-14, 2013.

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