Issue 15-30 September 01

HARAKAH

Column

The Jihad Of The Hamids Under The Shadow of Tabung Haji

M.G.G. Pillai

A jihad has broken out between two men - the minister in charge of religion in the Prime Minister's Department and the religious adviser to the Government -- that if looks could kill, both would be dead by now. Brig. General (R) Dato' Hamid bin Zainal Abidin joined the cabinet via the Senate when Dato' Hamid Othman, his predecessor, was defeated in the 1999 general election. Hamid Othman, a confidant of the Prime Minister, Dato' Seri Mahathir Mohamed, became religious adviser to the government. The two men hate each other's guts, and in their waking hours plot to destroy the other's closeness to the Prime Minister. Each believes that Islam UMNO protrudes must be what each postures.

And so, a jihad in Putra Jaya. It is the talk of Putra Jaya. Recently, Dato' Hamid Othman parked his car in a vacant slot for the religious ministry. Dato' Hamid Zainal Abidin seethed in unctuous anger and ordered the car removed. It brought to public notice the jihad of the two men; the retired army brigadier-general of religion became a minister and the other religious advisor to the Prime Minister. It masks a bitter control for huge properties and investments of Tabung Haji and other institutions distinctly Islamic. Dato' Hamid Othman lost control of it with his electoral defeat. He got some of it back when he was appointed religious advisor to the Government. He was appointed first executive then non-executive chairman of the crown jewel, Tabung Haji, but the general soon removed him. But he forgets the defeated minister has the Prime Minister's ear more than his.

No one talks about it, but the new man wants his cronies in lucrative positions in the Islamic financial pie. He has little time to achieve it. As a senator, he has only another five years left. But the irrelevance of this jihad escapes both men. For both have much to answer for the mess in Tabung Haji. Dato' Hamid Othman should have stopped it when he could but did not when a former chairman of Tabung Haji, a former mentri besar of Selangor and a brother-in-law of the Prime Minister, placed Tabung Haji's finances in jeopardy with his unwise investments on the organisation's behalf.

All eyes are now on the RM7.1 million some crook wiggled out of Tabung Haji, but the scale of the losses higher up is worse. Several hundred millions of ringgit was lost in an unwise oil palm investment in Indonesia and several hundred millions more in the Negri Sembilan Technical Corridor, meant to complement the Multimedia Super Corridor's success but one which under no circumstances could be. And that is only two; there are many more. No one talks of those losses in public, only what the small time crooks got away with.

Tabung Haji is a veritable can of worms. It made losses hand over fist, with no accounting or proper procedures followed. The Prime Minister was so horrified at the state of play that he brought professional management, in a process now showing results. But politics still runs riot -- as the feud between the two Hamids show -- and the problems so huge that things must get worse before it gets any better. Something must be done to turn it around quick, for the horrendous problems of Tabung Haji has seeped to the remotest village. An UMNO politician told of being struck dumb when his aged mother in a village in Perak far from the madding crowd asked him to explain why Tabung Haji is losing money.

Tabung Haji is the government's last frontier for respectability. The Prime Minister realises it, and wants the matter rectified immediately. But could a sinking financial behemoth as Tabung Haji be put right with a few changes at the top, changing directions without first finding out the extent of its problems? The government reacts without thinking -- at least it does in every facet of official policy, and it is safe to assume it would in rescuing Tabung Haji as well -- and the steps it takes cannot resolve the mess it is in. In the destruction of Malaysia's institutions of state in the past two decades, Tabung Haji was one. Every minister in charge had his own rationale of what they did, ensuring no continuity and therefore encouraging corruption to a degree unparalled elsewhere.

But Tabung Haji is not only an important financial institution with assets only slightly lower than the Employees Provident Fund, but one which gives the government much credit for the good it does. It encourages people to save for the Haj, and many continue to keep funds in it as a convenient place to save money. But once politicians took an active interest in it, and the body itself highly politicised, the rot set in. First, it was in the ferrying of pilgrims to the Haj, then it was in the investments it placed, and the culture of corruption and arrogance seeped in. Then people placed large sums of unaccountable wealth as deposits, effectively putting themselves out of reach of regulatory agencies like the Police and the Anti-Corruption Agency.

Tabung Haji allows a maximum investment of RM3 million per member but that is for those who only dream of such amounts. For all others, special rules apply. One director once brought in several millions for deposit in his and his family's accounts. It was credited the accounts although each had reached the maximum before then. Until professional management came in the past two years, the political chairman ordered large scale investments without due diligence, with Tabung Haji paying a far higher than its actual worth for no reason than that the chairman of the day wanted it.

Tabung Haji has raised the cost of pilgrimage to the Haj yet again. It loses so much money from its subsidiaries and investments that it cannot explain why costs rise so dramatically when those who go the Haji privately actually pay half what Tabung Haji charges. There is an apparent rip off at every level of the trip. The airlines come from well connected individuals, in this instance, at least for a while, a son of the Prime Minister. Earlier, a decade or so ago, the travel arrangements were made by the father of a now disgraced cabinet minister. No one thought then to question this. They could not. They would have lost their jobs if they had dared to question.

That then is the tragedy of Tabung Haji, as it is of every institution of state. Rules of accountability and procedure are ignored when a politically powerful man insists on having his way. Corruption had seeped into the higher reaches of Tabung Haji a long time ago that its losses in new ventures could be explained easily if you look at how the joint venture partners made money at the expense of Tabung Haji. The new professional management tries against high odds to right some of the wrongs, but could they without damaging the high respect Tabung Haji had amongst Muslims. But it must be complemented with those responsible charged in court for their wrongdoing. Otherwise, nothing would change.

Tabung Haji also attracts the government's attention for its large reserves. The EPF, despite official claims to the contrary, is subborned to invest in crazy schemes like the Bakun hydroelectric dam and in hotels that cannot ever make money, throwing good money after bad. It claims to have RM180 billion in assets, but that cannot be at book value but at the far higher prices they bought them for. Try and get your savings back and you get into a maze so convoluted that you often give up. With an official though unrevealed debt of about RM190 billion, with the extent of the private corporate debt unknown, the government would face a cash crunch soon enough. The Tabung Haji reserves would come in useful. But is it right that its reserves be used to bail out the goverment? But these are not matters that the two Hamids have time for as they attempt to knock the other off his perch in this pointless jihad.

M.G.G. Pillai