KUALA LUMPUR: Discussions to reclaim assets bought at a premium by the government through special purpose vehicle Urusharta Jamaah Sdn Bhd in 2018 are in the early stages, said Tabung Haji yesterday.
Tabung Haji chief financial officer Mustakim Mohamad stressed that discussions with the government on the return of the assets were ongoing.
He also did not disclose which assets would be returned or when the process of returning those assets would begin.
"We will assess whether or not returning these assets will benefit Tabung Haji, and decide which assets can be used or will remain with Urusharta Jamaah. It is too early to determine the next steps," said Mustakim at a media briefing after Tabung Haji's 2023 financial results announcement.
The pilgrim fund will continue to enhance its balance sheets and investments to sustain the profit distribution for its depositors.
Tabung Haji announced a profit distribution of 3.1 per cent after zakat to its more than 9.15 million depositors for last year involving a sum of RM2.72 billion.
It had paid out RM2.65 billion to 8.8 million depositors in 2022.
To recap, Prime Minister Datuk Seri Anwar Ibrahim announced on Sept 29 last year that the government would return the assets to Tabung Haji.
In December 2018, Urusharta Jamaah acquired RM19.9 billion worth of underperforming properties and equities in exchange for RM10 billion in sukuk (fixed income) and RM9.9 billion in Islamic redeemable convertible preference shares (RCPS-i) in a move to revive the pilgrim fund.
Of the RM19.9 billion assets, 80 per cent were equities and the remaining were properties.
Properties with less than two per cent yield and equities that have seen impairment of over 20 per cent were acquired by Urusharta Jamaah at book value.
Tabung Haji's then-group managing director and chief executive officer Datuk Seri Zukri Samat said there were no cash transactions or government guarantees involved in the exercise.
At the time, Urusharta Jamaah issued a seven-year non-tradable sukuk, wholly subscribed by Tabung Haji along with the RCPS-i, with no maturity or dividend.
Meanwhile, Tabung Haji managing director and chief executive officer Syed Hamadah Syed Othman said more than half of the fund's investments were in sukuk or fixed income, which provided a solid foundation for consistent returns.
"The remaining portion will be allocated to equities and real estate, both domestically and internationally," he noted.
He pointed out that Tabung Haji had no plans of investing abroad.
"Although there are broader opportunities for foreign investments that can offer competitive returns, we will continue to support the government's aspiration to focus on domestic investments," he added.
Tabung Haji's strategy for foreign investments is currently limited to 10 per cent, although there is room for an expansion.
Syed Hamadah said it had long-term strategic investments that could enhance returns for depositors in the years to come.
"These are the efforts that the institution will undertake to provide sustainable, stable, and good returns to depositors."
He emphasised that the fund's foremost goal was to guarantee secure deposits and steady returns, aligning with Tabung Haji's mandate.
"This objective is attained through a disciplined strategic asset allocation approach, ensuring that returns match the associated investment risks consistently."
Chairman Tan Sri Abdul Rashid Hussain emphasised the efforts to address the fund's legacy issues concurrently.
He highlighted that Tabung Haji's primary concern revolved around the rising costs associated with the haj pilgrimage, which he said were outside the institution's sphere of influence.