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Friday, May 15, 2015

DAP BOMBSHELL: Takaful deal part of devious trend to appoint 1MDB directors to rich govt agencies to tap their CASH?

DAP BOMBSHELL: Takaful deal part of devious trend to appoint 1MDB directors to rich govt agencies to tap their CASH?
Following the furore surrounding Lembaga Tabung Haji’s attempt to inject cash into debt-ridden sovereign fund 1MDB through the controversial RM188 million purchase of land in the Tun Razak Exchange development, it has been revealed today that government-linked Islamic insurance company, Syarikat Takaful Malaysia Berhad (Takaful Malaysia) had bought RM85 million worth of Islamic bonds from 1MDB.
According to Takaful Malaysia’s group managing director Dato’ Sri Mohamed Hassan Kamil, the bond was purchased in 2009 from the Terengganu Investment Authority (TIA), which is the previous name of 1MDB, at a coupon rate of 5.75 per cent and a maturity period of 30 years.
While Hassan Kamil insists that the sukuk bond represented a “very small exposure” of only two to three per cent of Takaful Malaysia’s total asset base, there appears to be some inconsistencies and questions arising from this deal that merits attention.
Firstly, it is strange to claim that the bond was purchased from TIA when, at the time of the bond’s issuance in May 2009, 1MDB had already been incorporated following the name change from TIA to 1MDB in January 2009.
Secondly, and even more pertinently, there appears to be another coincidental linkage between the management of Takaful Malaysia and 1MDB, particularly involving Takaful Malaysia chairman Tan Sri Ismee Ismail Ismee, whom we have recently learned also sits on the board of 1MDB.
Ismee’s involvement with 1MDB began when he was appointed to the board of directors of on 23 March 2009, together with former CEO of 1MDB Dato’ Shahrol Azral Ibrahim Halmi. This makes him a founding director of the sovereign fund.
Two months later, 1MDB issued Islamic medium-term notes or sukuk bonds worth RM5 billion, of which RM85 million were snapped up by Takaful Malaysia. Later in the same year, Ismee was appointed chairman of the board of directors of Takaful Malaysia following the resignation of the previous chairman Tan Sri Hadenan Jalil in July 2009.
Even if Ismee’s appointment as chairman of Takaful Malaysia took place a few months after the Islamic bond purchase, the fact remains that Takaful Malaysia is controlled by BIMB Holdings via a 60.31 per cent equity stake, while BIMB Holdings itself is owned and controlled by Lembaga Tabung Haji, of which Ismee has been CEO and group managing director since 2006.[1] In other words, the buck stops at Ismee.
More recently, Ismee’s name has also been linked to Tabung Haji’s much-derided land deal with 1MDB, as he is also the CEO and group managing director of the Muslim pilgrims’ fund. The purchase of the land had allegedly been approved despite an internal risk assessment report that warned of high risks.
There appears to be too many coincidences. It certainly seems that wherever Ismee goes, 1MDB’s interests would prevail. As such, Ismee should immediately come clean on his role in Takaful Malaysia’s RM85 million 1MDB sukuk purchase, as well as the RM188 million Tabung Haji-1MDB land deal. Whose interests influences his decision-making and where does his loyalties lie?
Finally, in the name of transparency and the public interest, Takaful Malaysia should also reveal the full details of the RM85 million bond purchase, including the price paid for every ringgit of bond purchased and whether the purchase was made directly or through the secondary market.
In light of the many questionable deals between 1MDB and other government-linked companies and funds, the Government should halt all transactions with the troubled sovereign fund until public confidence is suitably restored. Failure to do so would cast serious doubts on corporate governance in Malaysia, which would not only affect domestic confidence but also potentially our country’s sovereign ratings.
Zairil Khir Johari
Member of Parliament for Bukit Bendera
DAP Assistant National Publicity Secretary

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