TH Continues To Try To Obtain Remainder Of Arbitration Award From Al-Rawda
KUALA LUMPUR, Aug 11 (Bernama) – Lembaga Tabung Haji (TH) is continuing its efforts to obtain the remaining arbitration award from Saudi Arabia-based property developer and project management company Al-Rawda Real Estates Development & Project Management Co Ltd, including through asset tracing, after the company only paid 14.9 million Saudi riyal (one Saudi riyal = RM1.09) out of the 899 million Saudi riyal awarded.
Minister in the Prime Minister's Department (Religious Affairs) Dr Zulkifli Hasan said TH had taken all enforcement measures against Al-Rawda, but the company was found to lack the financial capacity to pay the amount.
He said that in November 2024, TH and Al-Rawda entered into a settlement agreement in an effort to recover the 899 million Saudi riyal.
However, Al-Rawda only paid part of the agreed amount of 14.9 million Saudi riyal before failing to comply with the terms of the agreement.
“TH has terminated the settlement agreement and is continuing its efforts to obtain the remaining arbitration award, including appointing a consulting company with expertise to conduct asset tracing,” he said at the ministerial briefing session on the Royal Commission of Inquiry (RCI) Report on TH and the efforts and actions taken to restore the institution’s financial position at the Special Sitting of the Dewan Rakyat today.
According to Zulkifli, the RCI identified Al-Rawda as among 14 troubled TH investments linked to losses running into billions of ringgit.
He said that in 2015, 2016 and 2017, TH leased four hotels in Makkah and Madinah and paid about RM1.55 billion upfront to Al-Rawda for a lease of 10 to 18 years.
"This is an extraordinary and not 'normal' transaction.
"Not only that, TH had appointed Al-Rawda as the operator of the four hotels through a Management and Operation Agreement with a lease rental income of 2.49 billion Saudi riyal, and in return, TH only received a promissory note (PN) personally guaranteed by the owner of Al-Rawda, Dr Mashhoor Ali Omar Almadoodi," he added.
However, he said Al-Rawda had failed to pay rental income since March 2019, causing TH to initiate enforcement proceedings in Saudi Arabia.
The arbitration proceedings initiated by Al-Rawda against TH were subsequently resolved through a Final Award dated April 16, 2023 in favour of TH, with Al-Rawda ordered to pay 899 million Saudi riyal.
On July 29, the 211-page RCI report was made public, containing various findings related to weaknesses in the management and operations of the institution for the period 2014 to 2020.
The RCI report also submitted 25 recommendations for improvement actions, 75 per cent of which had been implemented by TH as of July 30.
The government announced the establishment of the RCI in 2021, followed by the appointment of RCI members on Jan 20, 2022, which saw the RCI report subsequently presented to the King on Aug 30, 2022.
-- BERNAMA