This article first appeared in The Edge Malaysia Weekly on December 25, 2023 - December 31, 2023

After a 20-year hiatus, Tan Sri Abdul Rashid Hussain made a comeback to Corporate Malaysia when he was appointed chairman of pilgrim fund Lembaga Tabung Haji (TH), effective Dec 20 this year.

When his appointment was announced, it took corporate players and market watchers by surprise, as the last time he made a corporate move was in June 2017 when he surfaced as a 7.59% shareholder in timber outfit Priceworth International Bhd. This acquisition, however, was not significant. He held the stake for just over two years. The purchase was a ripple compared to the deals he advised on when he was a corporate mover and shaker.    

Abdul Rashid had kept a low profile since he stepped down from all his directorships in early February 2003, when Sarawak-based Utama Banking Group Bhd took over the reins of Rashid Hussain Bhd.

To the uninitiated, Abdul Rashid, or better known as Rashid Hussain, is the “RH” in RHB Bank Bhd, currently Malaysia’s fourth-largest banking group by assets. His rise in Corporate Malaysia is well-documented.

Abdul Rashid, now 76, was quite a dealmaker in his heyday in the 1980s and 1990s.

In 1983, he obtained a broker’s licence and set up Rashid Hussain Securities Sdn Bhd. In 1988, it became the first brokerage to be listed on Bursa Malaysia (then the Kuala Lumpur Stock Exchange), as Rashid Hussain Bhd.

A year later in 1989, Rashid Hussain Bhd acquired a 20% stake in Development & Commercial Bank.

Then in 1997, it acquired a 75% stake in Kwong Yik Bank Bhd from Malayan Banking Bhd for RM2.2 billion in cash and merged it with Development & Commercial Bank. The merged DCB Bank and Kwong Yik Bank was renamed RHB — for Rashid Hussain Bhd — Bank.

The acquisition of Kwong Yik Bank at 3.2 times book value was completed in 1997, just before the Asian financial crisis, and still stands today as among the most expensive banking deals in the country.

Also in 1997, Abdul Rashid engineered the acquisition of a 20% stake in Indonesia’s PT Bank Niaga for RM247 million in cash, although this was later sold.

A year later, RHB Capital in which Rashid Hussain Bhd had 65% equity interest, acquired 100% of troubled Sime Bank Bhd for RM852 million, financed by the issuance of new shares and RM500 million in 10% subordinated bonds to Danamodal Nasional Bhd, a Bank Negara Malaysia vehicle.

The series of acquisitions within a short span cost Abdul Rashid the group as the banking sector was the worst hit during the crisis and RHB Group had a lot of exposure to the stock market.

After his financial empire was swallowed up by Utama Banking Group and later the Employees Provident Fund, Abdul Rashid remained low key, until now. His exit from Corporate Malaysia was often attributed to his political affiliations.

At 76, it is not clear how much of an impact the businessman will have as chairman of TH, which as at end-November this year had total deposits of RM88.9 billion.

The pilgrim fund had gone through a rough patch following findings of questionable investments, illegal dividend payouts and accounting irregularities, forcing the government to throw it a lifeline by buying its underperforming stocks and assets for almost RM20 billion in 2018. The stocks were transferred to a special purpose vehicle under the Ministry of Finance called Urusharta Jamaah Sdn Bhd.  

Given Abdul Rashid’s experience, his chairmanship should prove invaluable to the pilgrim fund. — By Jose Barrock

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