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HR: Daylight Robbery At Tabung Haji
By Harun Rashid
6/9/2001 12:56 am Thu
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
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
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
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
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
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.
So a bailout must come. In the meantime, those who have money in the
Tabung Haji pilgrimage fund are advised to re-evaluate the security
offered by this savings institution. While the offer of a public bailout
may be a comfort to some, there is nothing like having the cash back in
hand. Those who act promptly will find the doors yet open. Those who
have established a program of automatic monthly deposits may
re-consider the wisdom of continuing.
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