The complete approval process for Lembaga Tabung Haji's controversial RM193.5 million acquisition of a 30 per cent stake in Putrajaya Perdana Bhd unfolded during a period when the construction company was said to be controlled by Low Taek Jho, according to sworn testimony presented to Parliament this week. Finance Minister II Datuk Seri Amir Hamzah Azizan disclosed the troubling chronology while addressing lawmakers during deliberations on a Royal Commission of Inquiry report examining Tabung Haji's governance and management practices.
Evidence extracted from the SRC International trial established that the fugitive businessman exercised influence over Putrajaya Perdana through his ownership of Utama Banking Group Bhd, an arrangement that persisted until April 13, 2015, when the company was finally sold. This timeline proves particularly significant because every major milestone in Tabung Haji's acquisition process—from the Investment Panel's endorsement on July 24, 2014, through board approval on August 25, ministerial sign-off on August 27, and the formal sale agreement signed December 3, 2014—occurred squarely within the window when Jho Low's alleged control remained intact. The chronological compression raises serious questions about the due diligence standards that Tabung Haji's leadership applied when deploying the pension fund's depositors' money.
According to Amir Hamzah's parliamentary statement, Putrajaya Perdana director Datuk Rosman Abdullah testified that SRC International, the controversial former 1Malaysia Development Bhd subsidiary, had channelled RM170 million into Putrajaya Perdana's construction subsidiary across three separate transfers during July and August 2014. The court proceedings, though they did not produce an explicit finding that Jho Low held beneficial ownership of Putrajaya Perdana during the acquisition, created a substantial evidentiary record documenting the financial flows and corporate relationships that defined the transaction. The SRC International case has long been central to understanding the mechanisms through which Malaysian state assets were allegedly misappropriated during the 1MDB scandal.
A critical gap emerged in Tabung Haji's investment governance when the Investment Panel formally requested on July 24, 2014, that management identify the ultimate shareholder of the selling entity. Despite this explicit directive from the fund's own oversight body, no documented response was ever provided, and the transaction proceeded regardless. The fact-finding assessment conducted in 2023 found no evidence that this fundamental question of ownership transparency was ever answered to decision-makers' satisfaction, establishing a pattern of inadequate information flow that undermined the entire approval architecture. This represents not merely an administrative oversight but a structural failure in fiduciary responsibility when deploying pensioners' retirement savings.
The valuation methodology applied to the 30 per cent stake underwent mysterious transformations that reflected poorly on Tabung Haji's investment discipline. The Research Division initially assessed the stake at a value between RM124 million and RM155 million, yet the board ultimately approved a RM193.5 million purchase price without documenting written justification for this substantial upward revision. The original proposal had contemplated a 25 per cent stake, but this was unilaterally increased to 30 per cent without explaining the rationale for either the stake expansion or the valuation jump. Most damning, the due diligence review occurred only after all approvals had already been secured, meaning risk assessment followed rather than preceded the commitment of funds—a sequencing that inverts fundamental investment practices.
When examined against Putrajaya Perdana's acquisition history, the valuation structure appears even more problematic. The seller had originally purchased the entire equity stake in 2012 for RM260 million, implying a theoretical 30 per cent share value of RM78 million at that time. Two years later, Tabung Haji accepted a valuation nearly triple that figure, representing a tripling of asset value that lacked credible justification given no material improvements to the company or market conditions could explain such dramatic appreciation. This mathematical reality suggests either extraordinary operational transformation occurred between 2012 and 2014, or the pricing reflected something other than genuine asset value—a distinction that should have triggered intensive scrutiny from Tabung Haji's decision-makers.
The two fundamental promises anchoring Tabung Haji's investment case failed to materialise, undermining the basic business logic that should have justified the outlay. The acquisition was predicated on Putrajaya Perdana achieving relisting on a stock exchange within twelve months and generating RM86 million in profit during 2015. Neither objective was accomplished, yet the investment remained in Tabung Haji's portfolio deteriorating in value rather than appreciating. The parallel finding that Tabung Haji's chairman simultaneously held the chairmanship of Putrajaya Perdana itself creates an alarming dual-role conflict, raising questions about whether the investment decision represented genuine arm's-length negotiation or reflected internal corporate alignment.
Tabung Haji attempted to recover from this investment disaster by exercising a put option in March 2018, demanding that the seller repurchase the shares at a value of RM210.7 million. The seller refused to comply with this obligation, forcing the pension fund to absorb the entire loss. By the conclusion of the 2024 financial year, Tabung Haji had written down the entire RM193.5 million investment to zero, crystallising the loss across its pensioner investor base. The failure to recover proceeds represents not just a financial loss but evidence that no contractually binding exit mechanism existed to protect the fund's position, another governance deficiency compounding the initial acquisition misjudgement.
The broader patterns identified in the 2023 fact-finding assessment suggest the Putrajaya Perdana transaction exemplified systematic governance failures rather than an isolated incident of poor judgment. Four separate investments underwent no required due diligence procedures, while Risk Management Department recommendations went unheeded across multiple transactions. This institutional breakdown indicates that Tabung Haji's decision-making apparatus lacked effective internal controls, creating conditions under which questionable investments could advance despite built-in warning systems. The scope of governance deficiency extends well beyond the specific executives responsible for the Putrajaya Perdana decision to implicate the fund's entire investment oversight architecture.
Tabung Haji has now initiated legal proceedings against the seller, securing a Mareva injunction to freeze assets while pursuing a damages claim. Court-directed mediation was scheduled for August 11, with trial proceedings not anticipated until June 23, 2027, indicating that resolution of this dispute will consume years of litigation and continued uncertainty regarding recovery. The extended timeline for resolution compounds the governance tragedy, as pensioners remain affected by capital that remains tied up rather than productively deployed. This protracted legal battle underscores how initial governance failures cascade into years of institutional distraction and expense, with ultimate recovery remaining uncertain despite Tabung Haji's legal remedies.
