When I first issued a statement two nights ago demanding answers to what appeared to be credible allegations regarding a possible land purchase deal between Lembaga Tabung Haji (LTH) and 1MDB, little did I expect the issue would blow up to such proportions.
As I write this statement, every online media outlet is replete with articles over the highly questionable land sale that appears to have netted debt-ridden 1MDB a handsome RM184 million profit for essentially acting as a land broker, having bought the 1.56 acres of land four years ago for a mere RM4.5 million or RM64 psf.
Had the land been purchased by a private developer, perhaps it would not have been much of a concern. Unfortunately, 1MDB sold the land off to LTH, which had apparently acted against the many warnings of their own internal risk assessment report. This raised immediate concerns about the possibility of our national Muslim pilgrims’ fund being used to bailout the troubled sovereign fund.
Conflict of interest
Soon, questions regarding corporate governance and a potential conflict of interest emerged following revelations that senior LTH executives, CEO Tan Sri Ismee Ismail, Deputy CEO Dato’ Johan Abdullah, LTH investment panel member Tan Sri Abdul Samad Alias and LTH director Tan Sri Irwan Siregar, all happen to also hold top positions in the third-party vendor to the deal, 1MDB. Tan Sri Ismee is a director of 1MDB, Dato’ Johan is chairman of a 1MDB subsidiary, while both Tan Sri Abdul Samad and Tan Sri Irwan Siregar sit on the 1MDB advisory board.
This begs the question – whose interest did they have in mind when they decided to put the land deal together? Was Tan Sri Ismee, Dato’ Johan, Tan Sri Abdul Samad and Tan Sri Irwan acting on behalf of the millions of Muslim depositors of LTH, or were they more concerned about the flagging financial fortunes of 1MDB?
Perhaps it is more interesting to note that among those who pointed out this concern are former Umno Supreme Council member Dato’ Saifuddin Abdullah and the Umno Youth Wing itself, via its leader and Cabinet Minister Khairy Jamaluddin. Barely less than a month ago, the Umno Youth Wing had declared its full and unequivocal support to Najib, amidst allegations and questions over the 1MDB scandal.
How quickly things have changed.
All-out assault from all sides
Never has a political issue gained so much traction and agreement from both sides of the divide. Strong statements have been issued not only by DAP, Pas and PKR leaders, but also Umno leaders past and present, including former Prime Minister Tun Dr Mahathir Mohamad. Even moderate Islamic NGO Abim and extreme right-wing group Perkasa have both come out strongly against the deal.
It is now very clear that the ship is sinking. In addition to Khairy’s stinging statement of reproach, Deputy Prime Minister Tan Sri Muhyiddin Yassin and fellow Cabinet Minister Dato’ Seri Shafie Apdal have weighed in on the issue, warning of a loss of confidence and raising serious concerns about the management of 1MDB. Both demanded answers.
At the rate this issue is unfolding, the Federal Government looks set to capitulate unless visible steps are taken immediately to ensure accountability. In plain and in no uncertain terms, those responsible must be made to pay the price.
Heads must roll
Firstly, there is no doubt that the entire senior management and Board of Directors of LTH have failed to carry out not only their fiduciary duties as managers of public funds, but also as trustees of a great religious duty. This is not limited to those with a foot each in LTH and 1MDB, but to the entire team including LTH Chairman Dato’ Sri Abdul Azeez Abdul Rahim. In other words, the whole LTH leadership must be replaced.
However, the buck ultimately stops with the number one man. To begin with, the entire debacle would not even have occurred had it not been for 1MDB’s misadventures, resulting in the sovereign fund racking up a massive debt of RM42 billion, which it now appears unable to repay.
Therefore, responsibility lies on the shoulders of the man who is not only Chairman of 1MDB’s Board of Advisers, but also the person responsible for appointing all the key personnel in both LTH and 1MDB.
There does not appear to be any other option. Prime Minister Dato’ Sri Najib Razak must bear the ultimate responsibility by resigning with immediate effect.