Kuala lumpur: Lembaga Tabung Haji (TH) is continuing its efforts to obtain the remaining arbitration award from Al-Rawda Real Estates Development and Project Management Co Ltd, a property developer and project management company based in Saudi Arabia. This comes after Al-Rawda paid only 14.9 million Saudi riyals out of the 899 million Saudi riyals awarded. TH is employing asset tracing as part of its strategy.
According to BERNAMA News Agency, Dr. Zulkifli Hasan, Minister in the Prime Minister's Department (Religious Affairs), stated that despite TH's enforcement measures, Al-Rawda lacks the financial capacity to meet the payment. In November 2024, TH and Al-Rawda had entered a settlement agreement to recover the full amount, but Al-Rawda failed to comply, paying only a portion of the agreed sum.
TH has since terminated the settlement agreement and appointed a consulting company to conduct asset tracing. Dr. Zulkifli shared this information during a briefing on the Royal Commission of Inquiry (RCI) Report on TH, focusing on efforts to restore the institution's financial position.
The RCI identified Al-Rawda as one of 14 troubled investments linked to significant losses for TH. Between 2015 and 2017, TH leased four hotels in Makkah and Madinah from Al-Rawda, paying approximately RM1.55 billion upfront for leases of 10 to 18 years. TH also appointed Al-Rawda as the operator of these hotels, with a lease rental income of 2.49 billion Saudi riyals, backed only by a promissory note from Al-Rawda's owner, Dr. Mashhoor Ali Omar Almadoodi.
Since March 2019, Al-Rawda has failed to pay the required rental income, leading TH to initiate enforcement proceedings in Saudi Arabia. The arbitration proceedings against TH concluded with a Final Award on April 16, 2023, in favor of TH, mandating Al-Rawda to pay the 899 million Saudi riyals.
The RCI report, released on July 29, spans 211 pages and highlights various management and operational weaknesses within TH from 2014 to 2020. It provides 25 recommendations for improvements, 75 percent of which TH had implemented by July 30. The RCI was established by the government in 2021, and its members were appointed on January 20, 2022. The report was presented to the King on August 30, 2022.