Former Tabung Haji executives face charges of deceiving the board over RM3.3 billion in hibah

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Tabung Haji executives charged

Highlights

Former Tabung Haji CEO and CFO charged with deceiving the board through a proposal to adjust the valuations of three properties to approve a RM3.3 billion hibah distribution for 2017.
The prosecution says the two accused knowingly presented asset values above market rates to the board in a working paper dated 9 Feb 2018.
Court sets bail at RM60,000 each; the case has implications for governance and reporting practices at Islamic financial institutions in Malaysia.

This article was translated from the original. Read the original version by our correspondent here.

Charges and details of the court case

As reported by The Edge Malaysia, former TH group chief executive officer Datuk Seri Johan Abdullah, 70, and former TH chief financial officer Datuk Rozaida Omar, 63, pleaded not guilty at the Kuala Lumpur Sessions Court to charges of deceiving the institution’s board of directors. They entered their pleas after the joint charge was read before judge Norma Ismail.

The two accused are alleged to have conspired to deceive the TH board of directors by preparing and presenting Working Paper No. 3/2018 (K)(358), which proposed adjustments to the valuations of three investment properties: the TH Platinum Park, TH Perdana and TH Selborne buildings. The proposed adjustments were allegedly intended to increase TH’s profits in its unaudited financial statements for the financial year ended 31 Dec 2017, enabling it to distribute about RM3.3 billion in hibah to depositors.

The prosecution also alleges that they committed the offence despite knowing that the properties should have been valued at lower market rates, thereby inducing the board to approve the working paper and the valuation adjustments. The offence allegedly took place at Menara TH Tun Razak, Jalan Tun Razak, between 3 p.m. and 10:30 p.m. on 9 Feb 2018.

Legal implications and next steps

The charges were brought under Section 417 of the Penal Code, read together with Section 34 of the same code, which carries a maximum prison sentence of five years, a fine, or both upon conviction. The prosecution team was led by Deputy Public Prosecutor Datuk Nazran Mohd Sham, together with Rohaiza Abd Rahman and Siti Aina Rodhiah Md Shikh.

Rozaida is represented by lawyer Shamsul Sulaiman, while Johan is represented by Datuk Shukri Mohamed and Malissa Shukri. The court granted bail of RM60,000 for each accused, with one surety, and set 8 Dec for the next mention to facilitate the submission of documents.

The case has drawn further attention to governance and financial reporting in Malaysia’s Islamic financial institutions, particularly when asset valuations directly affect returns distributed to depositors. The focus is expected to shift next to the evidentiary documents and how the proposed valuation adjustments were presented to the board at the time.

In our earlier article on the impact of the 1MDB scandal on corporate governance, we highlighted how failures in controls, audits and checks and balances widened the debate over who should be held accountable. We also underscored calls for greater board accountability, stronger whistleblower protections and a more proactive approach by internal auditors to detect risks earlier.

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