By Harizah Hanim Mohamed
KUALA LUMPUR, Aug 11 (Bernama) –- The government always ensures that its debts are repaid, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
He said government debt instruments such as Malaysian Government Securities (MGS) and Treasury bills, for example, are consistently serviced by the government.
Amir Hamzah was responding to concerns raised by Hassan Abdul Karim (PH-Pasir Gudang) over whether the government would be able to honour its guarantee for sukuk issued by Urusharta Jamaah Sdn Bhd (UJSB).
UJSB, established on Dec 14, 2018, is a special purpose vehicle (SPV) tasked with managing assets transferred from Lembaga Tabung Haji (TH).
Amir Hamzah also explained that the government had restructured TH’s zero-coupon bond sukuk into sukuk with annual profit distributions to meet payment obligations for the RM27.5 billion sukuk issued by UJSB.
“The sukuk issued in 2018 was structured as a zero-coupon bond, meaning the returns were received at the end of the sukuk’s maturity. At the time, the sukuk was issued at RM19.6 billion, but its value upon maturity was RM27 billion. The difference of about RM8 billion represented the returns to TH,” he said during the winding-up session of the Dewan Rakyat’s Special Briefing on the Royal Commission of Inquiry (RCI) report on TH, presented by Minister in the Prime Minister’s Department (Religious Affairs) Dr Zulkifli Hasan on Tuesday.
“With these returns, TH was able to fund its annual hibah payments. The return on the first sukuk was about 4.05 per cent, while Sukuk 2 offered about 4.1 per cent,” he said.
Amir Hamzah said the restructuring meant that the hibah paid was higher, while the returns were also better than what TH would have earned had the funds been invested in government-issued securities. “We want to ensure that the returns to TH are sufficient and better than those provided previously,” he added.
The RCI also recommended that the returns from the zero-coupon bonds be converted into cash payments.
“Therefore, when we restructured Sukuk 1 and Sukuk 2, we converted them from zero-coupon bonds into sukuk that pay annual coupons. The return is 3.86 per cent, higher than the approximately 3.6 per cent return on government securities. For Sukuk 3, Tabung Haji receives returns of about RM440 million annually. That is the return to Tabung Haji,” he said.
-- BERNAMA