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Daylight Robbery At Tabung Haji

by Harun Rashid

Sep 5, 2001

The economist views savings as deferred spending. Money stored in the form of savings is consumer spending for the future. The saver, however, views money saved as liquid security, a reserve against unforeseen contingency.

It is comforting to have a tidy sum put aside to pay for the children's college education, a down payment on a new house or car, or perhaps a trip to Mecca. But this is true only so long as the money is deemed safe; otherwise it is a needless and nagging worry.

Savings kept at home have a negative aspect, in that they create an additional security problem, because liquid assets attract thieves. Money kept in the house lures thieves who come in the night. This poses a real threat to the entire family. It is not uncommon that a family will be murdered by persons unknown when theft of stored money is the motive. Having a security guard on duty is no guarantee of security, as recent incidents reveal.

Ordinarily, it is safe to place saved money in a bank, either a commercial bank or a savings bank. The elaborate vaults and concrete walls of the bank protect your money until you wish to withdraw it for whatever purpose.

One sleeps well knowing that the money is safe, carefully watched over by trusted guardians specially trained for the purpose. If a prior agreement is in force, the deposited money may be used for lending out, and the fund will pay a return for temporary use of the money.

In Malaysia there is a venerable savings institution founded for the specific purpose of encouraging thrift among Muslims to enable them to perform the Haj, a pillar of Islam. Muslims regularly deposit money there, and trust the Tabung Haji officers to safeguard it. It has grown to be a large and important fund, headquartered in the capital. The tall reactor-shaped building of the Tabung Haji is architecturally splendid, and its distinctive lines may be seen for miles. Depositors point from a distance and say, "There is where my Haj money is!"

Or was. The government has announced that a bailout is necessary, a strange event which attracts widespread attention. A savings institution is not supposed to fail as a commercial enterprise might. The funds should be invested conservatively, and risk is minimised. But losses are inevitable, and usually there is sufficient collateral to recover the money which was loaned.

The Tabung Haji is nowadays in the news regularly. One story related how RM1 billion was invested in Indonesian land to be developed for palm oil production. This was a strange decision, given that palm oil prices are not stable. The deal, however, was not completed.

According to the story, when the Indonesian government learned of the purchase, it was chagrined to find that it had sold the property for a measly RM400 million. Someone had then re-sold it to Tabung Haji, and was making a huge profit. The Indonesian government promptly cancelled the transaction.

When Tabung Haji requested the return of its RM1 billion, Indonesia returned the RM400 million it had received. Where is the rest? What happened to the missing RM600 million? One may well ask, as it has disappeared. It is a total loss to the depositors. This is a large sum, amounting to a decrease of 1% in the annual dividend. It would appear that someone has been negligent in the handling of the transaction, along with the funds supporting it.

At that time, as now, the head of the Tabung Haji was appointed by the Prime Minister, whose department supervises its operations. As head, the prime minister looked carefully at the qualifications of the available candidates, then chose his brother-in-law.

So the prime minister's brother-in-law is the proper person to ask. Unfortunately, he is deceased. The ACA might help in the inquiry. The prime minister is on record as having the phone number of the ACA. Apparently there has not been an official request for assistance. The ACA is perhaps requested to leave things to the prime minister, as is his habit in such personal matters. The public is fully convinced he will handle the case with complete confidentiality.

It would seem that the police might be helpful in discovering the whereabouts of the missing money. But to date, there is no announcement of a filed police report. This is unfortunate, as the police might be temporarily distracted from arresting concerned citizens under the odious ISA.

The recent report of the Human Rights Commission highlighted many professional failures (brutality) of the police. Recovery of the Tabung Haji money, along with identity and prosecution of those culpable, would contribute to a restoration of lost public regard. The present public image of the Malaysian police is low, closely resembling the enforcement arm of the Mafia.

The police, however, perhaps becoming more aware of their deficiencies, have asked for assistance from the renowned personnel of England's Scotland Yard, who have the motto, "We always get our man." The Malaysian police have a similar motto, "We always get our man, innocent or not."

Still, they have not been called in to investigate, to the mystification of the public. One must assume the losses are considered an internal affair of the Tabung Haji staff and the prime minister's department. In a sense, it is something of a family affair.

Another news item reported that an officer of the fund was stopped by two unknown men while driving his car alone in a suburb. The men demanded that RM100,000 of the fund's money, which the officer was carrying, be handed over to them. The fund officer complied, and neither the two men nor the money have been seen since.

The savings fund officer returned to tell his tale, though with nary a witness. If a police report was filed, it did not give the details of the fund officer's identity nor explain why he was carrying such a large sum in his car alone. To the depositor it appears that savings entrusted to the institution are not transported in a safe and secure manner. Ordinarily such transfers are made by armoured car. The police are looking for two men in a BMW.

The Tabung Haji fund has been named in recent activities regarding the purchase of listed stocks on the local bourse. This is unusual for a savings institution. It seems the savings funds are being used in a questionable manner to prop up the share value of the profit and dividend dry crony corporations which have gone a-cropper. As the share prices fall, so falls the value of the fund, necessitating the talk of another government bailout. As a continuing scheme, it is just a waste of good money attempting to rescue lost money.

When the government gave notice that a bailout is necessary, the amount of the required funds was not mentioned, only that, "It must not be allowed to fail." Since the Tabung Haji fund is huge, amounting to RM80 billion or more, the size of the loss may also be huge, requiring the largest bailout to date. Because the government is presently engaged in bailing out MAS, Renong, and the LRT, to the tune of RM10 billion or so, the Tabung Haji may require more money than is immediately available.

When the total of the depositors accounts is greater than the total assets of the fund, there is a technical bankruptcy. If every depositor arrives to withdraw his funds, there will not be enough to go around, and the doors must be closed. This cannot happen with the similarly strapped EPF, as more than half the money is trapped until the account holder reaches retirement age. But this is the present prospect facing the Tabung Haji, where the accounts are demand deposits, and may be withdrawn at the request of the account holder.

It is possible that the news is already creating a sense of unease, because large withdrawals have already been made. One man, in something of a hurry, withdrew not only his own money, but also money from the accounts of all the friends he could identify, appearing at the counter an average of three times every business day for a month. Each time he withdrew over RM100,000 in cash, hauling it across the counter and out the door with him. He did this every day for a month without attracting attention from the clerks at the counter. It must be assumed they were very helpful.

Withdrawals, large and small, require an identification card with picture and a thumbprint. So each time he came, he provided the correct IC with picture, gave the required thumbprint, signed the necessary papers, and waited patiently while the money was counted out in RM100 notes. The smooth manner in which the withdrawals were made by an unidentified person contributes nothing to increase the feeling of security necessary for one to entrust further funds to this sacrosanct institution.

The prime minister, commenting on the affair, remarked that there are problems of credibility with the story as given. He is percipient. The public agrees. The problem the prime minister has is that he is the party responsible. He appoints the officers of Tabung Haji, just as he appoints his ministers. His record of appointments is not a good one. Each time, he seems to be able to find just that one personality most suitable for the job, generally making a good face before the TV cameras of the continuing malfeasance in the handling of public property.

The prime minister has chosen new faces to correct the problems at Tabung Haji, this time selected for their knowledge and experience in fiduciary responsibilities, and hopefully more careful with the depositor's money. The nagging question remains, "Who got the money?" The prime minister has not put the hounds on the trail, seemingly more concerned with mollifying public outrage than identifying the culprits and recovering the lost funds.