Wrong for Tabung Haji chairman to follow Najib’s advice to sell land, says ex-judge

Lembaga Tabung Haji chairman Datuk Seri Abdul Azeez Abdul Rahim at the press conference last Saturday, saying that he will be taking the prime minister's advice and sell the land the Muslim pilgrim's fund had purchased from 1MDB last month. – The Malaysian Insider pic, May 12, 2015.Lembaga Tabung Haji chairman Datuk Seri Abdul Azeez Abdul Rahim was wrong to have followed Prime Minister Datuk Seri Najib Razak's advice to sell the plot of land the pilgrims' fund bought from 1Malaysia Development Bhd (1MDB) as the fund's board should act independently, a retired judge said.

Datuk Gopal Sri Ram (pic, right) said the directors of a company or institution were by law required to be independent and to act in the best interests of their organisation.

"They should not act upon the dictation of a third party but let the board decide.

"If they do so and the institution suffers a loss, they will be personally liable," the former Federal Court judge told The Malaysian Insider following Tabung Haji's move to sell a 0.63ha piece of land it bought from 1MDB for RM188.5 million.

The purchase caused an uproar among the pilgrims' fund depositors and leaders from both side of the political divide because the deal involved the government-owned 1MDB, which is known to be sitting on a pile of debt.

In a hastily called press conference on Saturday, Azeez said that the fund had been advised by Najib to sell the land at the Tun Razak Exchange (TRX) project in order to respect the "sensitivity" of Tabung Haji depositors.

Azeez said Najib had advised him to dispose of the land so that the fund's reputation would not be "tarnished" due to its business transaction with 1MDB.

Najib is also Finance Minister and chairman of 1MDB's advisory board. 

The issue of corporate independence and political conflict of interest had also been highlighted by anti-graft watchdog, the Centre to Combat Corruption and Cronyism (C4).

It pointed out that there was not only corporate conflict of interest in the deal, but also political interests as Azeez himself, besides other Tabung Haji board members, were leaders in Umno, the ruling Malay party of which Najib is president.

Azeez is the Baling member of Parliament and sits on the Umno Supreme Council, while Umno permanent chairman Tan Sri Badruddin Amiruddin, Umno deputy permanent chairman Tan Sri Mohamad Aziz and Umno Supreme Council member Datuk Rosni Sohar all sit on Tabung Haji’s board.

“The conflict of interest does not exist between the two companies alone, but it is further complicated by political interests, as they are also Umno leaders,” C4's co-founder Cynthia Gabriel had said.

Azeez has denied that there was any conflict of interest in the deal, even though some of Tabung Haji's top officials also held positions in 1MDB.

He said Tabung Haji group managing director and CEO Tan Sri Ismee Ismail, who also sits on 1MDB’s board, had stayed out of all the negotiations.

Another senior Tabung Haji executive and two board members, all of whom also hold 1MDB-related positions, however, did not abstain as they did not hold decision-making positions in 1MDB, Azeez had said.

Azeez had said the land would be sold to a buyer at a profit of at least RM5 million and the sale would be concluded within the next few weeks.

"We want to respect the concerns of the taxi drivers and those at villages who are worried about their deposit money," Azeez had said.

The fund bought the land with the view of developing a residential tower that could have yielded a profit of RM180 million within three years, he said.

The board is governed by the Tabung Haji Act 1995 and Section 6 of the legislation states that the chairman is appointed by the minister charged with the responsibility for pilgrimage control.

Other members of the board consist of a representative of the Prime Minister’s Department, a representative of the Treasury and not more than seven other members who shall be appointed by the Minister.

- TMI