KUALA LUMPUR: Lembaga Tabung Haji (TH) is taking steps to trace the flow of money and bank transfers linked to Al-Rawda Investment for Real Estate Development and Project Management Ltd (Al-Rawda) as part of efforts to recover debts from a loss-making hotel lease investment in Saudi Arabia.
Minister in the Prime Minister's Department (Religious Affairs) Senator Dr Zulkifli Hasan said TH was pursuing enforcement measures and working with Saudi Arabian authorities to trace the financial transactions.
He said the move was part of ongoing efforts to recover money owed to TH following Al-Rawda's failure to fulfil its payment obligations.
"The investment involved agreements signed between 2014 and 2017, under which TH entered into long-term leases for four hotels in Mecca and Medina," he said in a written parliamentary reply dated Monday (Oct 26).
"TH has taken legal action and initiated enforcement proceedings in Saudi Arabian courts over promissory notes issued by Al-Rawda and personally guaranteed by its owner after the company repeatedly failed to make payments under the agreements."
Zulkifli said Al-Rawda initiated arbitration proceedings against TH in 2021, which resulted in the company being ordered to pay TH SAR899 million (RM980.7 million at current exchange rates).
"Both parties subsequently signed a settlement agreement on Nov 27, 2024, outlining the payment arrangements for the arbitration award," he added.
However, he said Al-Rawda managed to pay only SAR14.9 million (RM16.25 million) of the total and failed to comply with the settlement terms despite being granted extensions.
"As a result, the settlement agreement was terminated on Jan 15 last year," he said.
Zulkifli added that TH had also submitted a formal complaint to the Governor of Mecca in September last year over Al-Rawda's failure to meet its obligations.
"TH views the matter seriously and remains committed to maintaining a sustainable investment portfolio in line with its risk tolerance," he said.
Datuk Azman Nasrudin (PN-Padang Serai) had asked about the government's measures to recover losses arising from the Al-Rawda hotel lease investment, as highlighted in the Royal Commission of Inquiry (RCI) report on TH.