KUALA LUMPUR: Ernst & Young Advisory Services Sdn Bhd states it is not the auditor of Lembaga Tabung Haji (TH) and it has not issued any “audit report” regarding the pilgrim fund’s financial statements.
EY pointed it did not review TH’s income statements nor was it involved in the valuation of the assets and liabilities of TH and its subsidiaries.
“EY was engaged by the directors of TH to report on whether the pro forma balance sheets as at 31 December 2015, 31 December 2016 and 31 December 2017 had been properly prepared based on the applicable criteria,” it said in a statement issued late Tuesday.
Issuing the statement following media reports linking it to TH -- which has been taken over by Bank Negara Malaysia -- EY said it did not perform an audit of the financial information used in compiling the pro forma balance sheets.
EY reported that the adjustments made were appropriate solely for the purpose of illustrating the impact of reporting TH’s investments in equities, securities and properties at realisable asset value on TH’s balance sheets.
Earlier on Tuesday, the Ministry of Finance announced it would take up RM19.9bil of TH’s underperforming assets comprising equities and properties which would be transferred to a special purpose vehicle (SPV), which will be owned by the government.
The exercise is to rehabilitate the pilgrimage fund’s underperforming assets and normalise its financial position.
Meanwhile, EY said it was engaged by the directors of TH to report on whether the pro forma balance sheets as at 31 December 2015, 31 December 2016 and 31 December 2017 had been properly prepared based on the applicable criteria.
Below is the full statement issued by EY:
11 December 2018
We refer to the various media reports on 11 December 2018 regarding Ernst & Young (“EY”) and Lembaga Tabung Haji (“TH”) and wish to clarify as follows:
1. Ernst & Young (“EY”) is not the auditor of TH and has not issued any “audit report” in respect of the financial statements of TH.
2. EY did not review TH’s income statements nor was EY involved in the valuation of TH’s and its subsidiaries’ assets and liabilities.
3. On the contrary, as stated in EY’s reports to the Directors of TH:
a. EY was engaged by the Directors of TH to report on whether the pro forma balance sheets as at 31 December 2015, 31 December 2016 and 31 December 2017 had been properly prepared based on the applicable criteria.
b. The Directors of TH prepared the pro forma balance sheets as at 31 December 2015, 31 December 2016 and 31 December 2017 solely to illustrate the impact of reporting TH’s investments in equities, securities and properties at realisable asset value instead of historical costs on TH’s balance sheets.
c. EY did not perform an audit of the financial information used in compiling the pro forma balance sheets.
d. EY reported that the adjustments made were appropriate solely for the purpose of illustrating the impact of reporting TH’s investments in equities, securities and properties at realisable asset value on TH’s balance sheets.
4. EY’s reports could not have been relied upon for the purpose of dividend declarations by TH on 4 February 2016, 3 February 2017 and 7 February 2018 for the financial years ended 31 December 2015, 2016 and 2017 respectively, as EY’s reports for the relevant years were only issued subsequent to the dividend declaration dates. EY issued its reports on 30 September 2016, 12 July 2017 and 23 May 2018 in respect of the pro forma balance sheets as at 31 December 2015, 2016 and 2017 respectively.
5. At no time did EY opine on the appropriateness of the declaration of distributable profit as dividend pursuant to the Tabung Haji Act 1995.
EY also wishes to draw attention to Section 22 of the Tabung Haji Act 1995, which stipulates the conditions to be fulfilled by TH in relation to declaration of distributable profit as dividend.
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