Tabung Haji's controversial RM193.5 million acquisition of a 30 per cent stake in Putrajaya Perdana Bhd proceeded while the construction firm remained under the control of fugitive financier Low Taek Jho, according to testimony presented during a parliamentary sitting to examine the religious fund's management failures. Finance Minister II Datuk Seri Amir Hamzah Azizan disclosed the connection while responding to lawmakers' concerns about the integrity of the transaction, which has now resulted in a total loss for the fund and sparked ongoing litigation against the seller.
The chronology of approvals mapped out by Amir Hamzah reveals that every significant milestone in the transaction unfolded during a period when Low, also known as Jho Low, wielded authority over Putrajaya Perdana through his ownership stake in Utama Banking Group Bhd. Sworn testimony from Putrajaya Perdana director Datuk Rosman Abdullah, recorded in the SRC International case, documented that SRC funnelled RM170 million into the company's subsidiary between July and August 2014. The Investment Panel gave its green light on July 24, followed by board approval on August 25 and ministerial endorsement on August 27, with the formal purchase agreement signed by December 3. All these events transpired before UBG divested its holding on April 13, 2015, a fact that places the entire approval sequence squarely within Low's period of control.
Tabung Haji's Research Division initially expressed reservations about the transaction's financial structure, estimating the 30 per cent stake should be valued between RM124 million and RM155 million rather than the proposed RM206 million. Nevertheless, the fund proceeded to pay RM193.5 million without documented justification for the valuation increase or the reason for expanding its intended stake from 25 to 30 per cent. This departure from standard practice circumvented critical safeguards that ordinarily protect institutional investors from overpaying for assets. The lack of transparency regarding the valuation methodology raised questions about whether decision-makers possessed adequate information to exercise proper stewardship over depositors' savings.
A particularly damaging detail emerged regarding the acquisition price's reasonableness. The seller, through the investment vehicle Cendana Destini Sdn Bhd controlled by Rosman Abdullah, had itself purchased the entire equity stake in Putrajaya Perdana for RM260 million in 2012—translating to RM78 million for a 30 per cent slice. Two years later, Tabung Haji paid an amount representing nearly three times that original purchase value. This disparity was never communicated to decision-makers and suggests the fund substantially overpaid for an asset whose underlying fundamentals had not materially improved.
The transaction's structural deficiencies extended to the conduct of due diligence. Amir Hamzah disclosed that comprehensive due diligence investigations proceeded only after all approvals had been secured, contrary to established best practices requiring such assessments prior to board and investment panel endorsement. This sequence inverted the proper order of investment discipline, allowing procedural formalities to substitute for substantive investigation. The minister noted that a 2023 fact-finding assessment identified a troubling pattern whereby four separate Tabung Haji investments escaped required due diligence scrutiny, revealing systemic weaknesses in governance procedures that should protect pension and savings institutions from imprudent capital allocation.
Central to the entire affair was an apparent failure to establish the true ownership structure of Putrajaya Perdana. On July 24, 2014, the Investment Panel explicitly requested that management identify the seller's ultimate shareholder—a routine requirement designed to surface conflicts of interest and link to potentially problematic parties. The fact-finding report found no record that management provided a response, yet the transaction proceeded regardless. This gap in information gathering proved consequential, as the subsequent revelation of Low's influence through UBG suggested that decision-makers acted without full knowledge of material facts that should have triggered heightened scrutiny.
The investment was structured on two specific promises that neither materialised. Putrajaya Perdana management assured Tabung Haji that the company would achieve a public listing within twelve months and generate RM86 million in profit during 2015. Neither outcome occurred. When these representations failed, the fund discovered that its chairman simultaneously held the chair position at Putrajaya Perdana—an undisclosed overlap that blurred accountability and governance lines. This interlocking directorate arrangement created conditions where individual board members might struggle to maintain objective independence.
As the investment deteriorated, Tabung Haji exercised a put option in March 2018, demanding that the seller repurchase the shares at a valuation of RM210.7 million. The seller declined to honour this obligation, leaving the fund holding a depreciating asset. By the close of the 2024 financial year, Tabung Haji determined that the entire RM193.5 million investment should be written off completely, converting a significant capital deployment into a total loss. The magnitude of this impairment underscores how the transaction's structural flaws and inadequate due diligence resulted in substantial damage to a fund serving millions of Malaysian depositors.
Recovery remains uncertain and protracted. Tabung Haji initiated legal action, filing a writ and securing a Mareva injunction to prevent the defendant from dispersing contested assets. Court-directed mediation took place on the day of the parliamentary hearing, yet the scheduled trial remains years away, set for June 23, 2027. The extended timeline reflects the complexity of pursuing litigation against financially sophisticated parties and the inherent delays in Malaysia's judicial system when managing large commercial disputes. In the interim, those funds remain unavailable for productive deployment or return to depositors.
The Putrajaya Perdana episode encapsulates systemic governance vulnerabilities that afflicted Tabung Haji during the period when Low wielded substantial influence over Malaysian financial institutions through vehicles like SRC International and UBG. The investment was approved without adequate scrutiny of the seller's true ownership, without transparent justification for the valuation, and without completed due diligence—all procedural shortcuts that favour swift deal closure over rigorous risk assessment. Parliamentary examination of these failures has now surfaced the connection to Low's network, lending credibility to concerns that the religious fund's capital fell victim to transactions designed more to benefit connected intermediaries than to generate returns for beneficiaries. As legal proceedings unfold over coming years, the case will likely serve as a cautionary example of institutional capture and the vulnerabilities that emerge when governance discipline erodes.
