A Federal Islamic charity body lost RM12 million through its gold pawn scheme, which went wrong because of incompetence, a government report said.
- Delayed sale of unclaimed jewellery worth RM80m waiting for price of gold to go up
- Eventually failed to sell or auction off 300kg of jewellery, resulting in loss of RM12m in value of gold
- Tried to cover up by forcing subsidiary to buy jewellery pawned through dozens of Ar-Rahnu outlets.
- Subsidiary has not settled payment for the gold
- 1,000 Ar-Rahnu customers told no balance left from the auction when the jewellery was not even sold
- Gold liquefied without owners’ consent
- A few kg of gold said to be missing following dubious transactions
- No investigation conducted due to alleged “interference” from foundation’s management
- Other issues include money allegedly diverted to pay high bonuses to YaPEIM’s top management, RM1mil payment of legal fees for lawyer who served as aide to former PM Najib
- Funds from foundation for orphans and the poor set up under YaPEIM used by former minister in PM Dept Jamil Khir Baharom for golfing and shopping
The Malaysian Islamic Economic Development Foundation (YaPEIM) failed to sell or auction off unclaimed jewellery worth RM80 million, the report said.
YaPEIM is a federal Islamic charity agency managing, among others, dozens of Ar-Rahnu outlets offering Islamic gold pawn scheme nationwide.
YaPEIM tried to cover up the losses by forcing its subsidiary to buy the 300kg of gold not claimed between 2012 and 2014.
This scandal is highlighted in a confidential government document related to YaPEIM’s expenses, sighted by The Malaysian Insight.
“Following its failure to sell and auction off the jewellery, Ar-Rahnu lost RM12 million in the value of gold,” the report said.
If the auction had taken place, Ar-Rahnu would not have incurred losses as the price of gold has never dropped more than 20% in the 20-month period.
According to the document, the delay selling off the jewellery was because the foundation was waiting for the price of gold to go up. At the same time, the gold had been liquefied without the owners’ consent.
YaPEIM’s shariah committee chairman Wan Zahidi Wan Teh objected to the matter and as a result, he was fired from his post, the document stated.
“YaPEIM’s management department forced Ar-Rahnu’s management to sell all 300kg of the gold to Input YaPEIM, a subsidiary company wholly owned by the foundation to cover up the matter.
“Until today, Input YaPEIM has yet to settle the payment for the gold,” the report stated.
A total of 1,000 Ar-Rahnu customers were affected. They were told there was no balance left from the auction when the jewellery was not even sold.
At the same time, a few kilogrammes of gold were said to be missing following several dubious transactions, the report said.
“There has been no investigation into this matter because there was interference from YaPEIM’s management.”
The report highlighted six issues, including money diverted to pay high bonuses to YaPEIM’s top management and payment of legal fees for former prime minister Najib Razak’s aide.
The ex-aide received almost RM1 million and bonuses amounting to RM250,000 to RM400,000 were paid to its senior staff.
Yesterday, YaPEIM’s legal officer Adawiah Abdul Samad said no funds set aside for orphans were used to settle the legal fees for Najib’s aide.
The legal fees came from YaPEIM’s general account, said Adawiah, adding that the sum was incorrect.
As for the bonuses, Adawiah said they were based on its existing scheme, again denying that the funds came from donations or the trustees.
YaPEIM falls under government oversight through a minister in the Prime Minister’s Department, normally in charge of Islamic affairs. It is managed by its president, deputy president and a board of trustees, whose members are appointed by the minister.
It does not receive government funds but accepts donations and participates in various economic activities, including running supermarkets, gold trading and in the real estate sector, with part of the profits used to fund welfare programmes.
Allegations of financial misappropriation were first revealed by the PKR-linked National Oversight and Whistle-blowers (NOW), whose director, Akmal Nasir, is now Johor Baru MP.
Akmal released a series of exposes in late 2015 on various claims of abuse of power and inappropriate spending by YaPEIM’s top management.
Last August, Minister in charge of Islamic affairs Mujahid Yusof Rawa said the authorities are combing its books to check for signs of misappropriation in YaPEIM, and that action taken if there is any wrongdoing. – TMI
Earlier report: May 11, RM1M for Orphans Used to Pay Legal Fees for Najib’s Aide