NEARLY eight years after Putrajaya moved to protect Tabung Haji’s depositors, one question remains unanswered: How much will the rescue finally cost taxpayers?
Urusharta Jamaah Sdn Bhd (UJSB) was created in late 2018 to take over Tabung Haji’s underperforming assets.
By the end of 2024, the government-owned company had RM11.4bil in assets against RM23.9bil in liabilities, while accumulated losses stood at RM12.4bil.
The answer to the question raised earlier will depend increasingly on how UJSB manages its investment portfolio.
Recent data shows that it is not simply selling the shares inherited from Tabung Haji.
It is committing fresh capital to selected companies, increasing other holdings and reducing positions where it sees less value.
Over the past one year, UJSB has generally increased its stake in companies like Elridge Energy Holdings Bhd, Solarvest Holdings Bhd, Kawan Renergy Bhd, Prolintas Infra Business Trust and Ramssol Group Bhd.
Meanwhile, it has cut its holdings in companies such as Malakoff Corp Bhd, Uzma Bhd, SMRT Holdings Bhd and Wasco Bhd.
In the case of Uzma, SMRT and Wasco, it has ceased to be a substantial shareholder, meaning its equity interest has fallen below 5%.
The activity confirms that portfolio management is now central to UJSB’s recovery strategy.
Taken together, these transactions show UJSB operating as an active capital allocator while remaining responsible for substantial financial obligations.
According to Bloomberg, UJSB’s five largest holdings accounted for about 39% of its listed portfolio, while industrial companies represented 30.1%, making performance sensitive to a concentrated group of investments.
UJSB’s portfolio rebalancing will create direct accountability for the company.
Future gains or losses from those positions will reflect its own valuations, risk controls and timing, rather than decisions made by Tabung Haji before 2018.
UJSB began without freely deployable capital or the option to wait for attractive opportunities. Its rebalancing efforts must overcome an immediate valuation disadvantage.
The company acquired 106 listed equity holdings, one unlisted plantation company and 29 properties from Tabung Haji at a transfer value of RM19.9bil.
Their estimated market value was only RM9.7bil.
The transaction helped repair Tabung Haji’s balance sheet but transferred the financial shortfall to UJSB, which is wholly owned by the Minister of Finance Inc.
UJSB paid RM300mil in cash and issued RM19.6bil through two zero coupon sukuk.
The first sukuk had a principal value of RM10bil and was structured to reach RM13.2bil after seven years, at a yield of 4.05%.
The second was issued at RM9.6bil and was scheduled to reach RM14.35bil after 10 years, at 4.1%.
Crucially, RM27.56bil was not the 2018 purchase value.
It was the combined amount the original sukuk were expected to reach at maturity after financing returns accumulated for seven and 10 years.
Breaking even does not require UJSB’s listed shares alone to be worth RM27.56bil.
UJSB can generate cash from dividends, property income, disposals and reinvestment gains.
Any amount it cannot recover, however, must be met through refinancing, asset transfers or government funding.
UJSB made progress in 2024 by recording its first annual profit, posting RM948.1mil after tax on RM1.4bil in revenue.
Yet the profit amounted to less than 8% of its RM12.42bil accumulated losses.
Immediate pressure was reduced in May 2026 when the first sukuk was settled largely through a new RM11.5bil sukuk with a 10-year tenure, together with the return of the Tun Razak Exchange land and UJ Estates in Sarawak to Tabung Haji.
The refinancing prevented a large immediate cash requirement, but most of the obligation was extended rather than repaid using portfolio proceeds.
The new sukuk also requires annual profit payments, while the second original series remains due in 2029.
To be fair, UJSB began from a position of weakness compared with its closest comparable, ValueCAP.
ValueCAP was established in 2002 and became operational in 2003 to invest in sound but undervalued Malaysian companies as foreign investors withdrew after the dot-com collapse.
ValueCAP had funds, purchase discretion and depressed entry prices.
UJSB inherited assets selected by another institution, accepted them at more than twice their market value and faced fixed obligations.
While ValueCAP sought returns from undervalued assets, UJSB had to recover an inherited deficit. This difference makes the current rebalancing critical.
Selling assets and repaying debt would reduce financing costs and government exposure.
Reinvesting could produce larger gains, but it would increase market risk and delay the generation of cash needed for repayment.
UJSB appears to be pursuing both approaches.
Its success should not be judged by the number of shares bought or sold, but by cash generated, returns earned, financing costs incurred, liabilities reduced and government funding ultimately required.
Greater disclosure is essential.
Unrealised gains cannot be used to repay sukuk until the underlying shares are sold or the investments generate cash income.
Future accounts should distinguish recurring income and realised gains from valuation movements, financing costs and government support.
The next decisive date is 2029, when the second original sukuk matures. UJSB has time to improve recoveries, but its starting deficit and remaining obligations leave little room for poor investment decisions.
Tabung Haji’s balance sheet was repaired in 2018. UJSB remains deeply in deficit.
Whether its rebalanced portfolio delivers sufficient returns will help determine how much additional government funding is ultimately required.