Share to help stimulate good governance, ensure future of people & M’sia
No News Is Bad News
TH RCI: Penalties of officers reduced, even ‘rewarded’ with promotion, RM1.4b loss reported as RM3.4b profit
KUALA LUMPUR, July 29, 2026: The Tabung Haji (TH) Royal Commission of Inquiry (RCI) found that five errant senior officers had their penalties reduced despite the scale of the wrongdoing uncovered.
The five are believed to be still employed and one was even promoted!
The TH RCI, declassified by the Cabinet today, also uncovered “creative accounting” and political influence behind TH’s financial woes.
It also found TH concealed the true state of its finances for years, like reporting a RM3.4 billion profit for 2017 when it should have recorded a RM1.4 billion net loss under proper accounting standards – a shortfall of nearly RM4.8 billion.
All these occurred during the Umno-led Barisan Nasional (BN) era of governance.
No News Is Bad News reproduces below two news reports on the TH RCI Report:
Penalties against 5 senior TH officers watered down, says RCI report
Panel says authorities took too long, and often too little action, relative to the scale of the wrongdoing uncovered.
The RCI report said five senior officers charged over four clusters of misconduct were still employed at TH or its subsidiaries as of 2022.
PETALING JAYA: The royal commission of inquiry into Tabung Haji (TH) found that senior officers implicated in multiple misconduct cases had their penalties repeatedly watered down on appeal, with all five involved still employed at TH or its subsidiaries as of 2022.
The RCI report, submitted to the Yang di-Pertuan Agong on Aug 30, 2022 and declassified today, said the pattern extended across police reports, internal disciplinary proceedings, referrals to the Malaysian Anti-Corruption Commission (MACC), and ongoing court and arbitration cases – with authorities and TH management alike taking too long, and often too little action, relative to the scale of the wrongdoing uncovered.
Dismissals reduced to demotions
The report said TH’s disciplinary committee charged five senior officers – group chief financial officer Rozaida Omar, chief operating officer Adi Azuan Abdul Ghani, senior general manager Rifina Ariff, chief human resources officer Hisham Harun, and legal adviser Hazlina Khalid – over four clusters of misconduct.
These included the sale of TH’s stake in PT TH Indo Plantations (THIP), a RM22.12 million Yayasan Tabung Haji contribution made without required ministerial approval, the disputed 2017 hibah declaration, and submission of false claims to TH’s payment unit.
It said while TH’s disciplinary committee initially imposed dismissal for the THIP and hibah cases and demotion for the Yayasan Tabung Haji case, an appeals committee later reduced nearly every penalty.
Only one demotion, over the false claims case, was upheld on appeal.
The report noted that all five officers remained with TH as of the report’s conclusion, several having moved into senior positions at subsidiaries, including TH Hotel & Residence, TH Plantations, and TH Properties.
Process took up to 19 months
The RCI also criticised the pace of TH’s internal disciplinary process, noting that one case took 19 months from an officer’s written response to a final decision, another took 15 months, and a third took 10 months.
It recommended the process be streamlined and expedited to be seen as effective, efficient, fair and transparent.
Separately, TH management filed four police reports between November 2018 and January 2019, according to the report.
Two remain unresolved years later – one over the 2012 sale of TH’s 95% stake in THIP to Indonesia’s PT Borneo Pacific for about US$910 million, alleging misrepresentation and concealment; and another over Trurich Resources’ US$58 million purchase of palm oil plantations in Kalimantan between 2008 and 2009, alleging manipulated land-suitability reports.
Both investigations have been held up pending cooperation from Indonesian authorities.
A third report, over alleged misuse of Yayasan Tabung Haji funds, has been referred to the Attorney-General’s Chambers.
A fourth, over the disputed 2017 hibah declaration, has also been completed by police and referred to the AG’s Chambers for a decision on prosecution.
The commission said authorities must act firmly and promptly on every police report or complaint lodged.
It said six matters have been referred to MACC and remain under investigation, including alleged corruption in TH Plantation’s purchase of Ladang Weida Bhd, alleged abuse of power in the leasing of two restaurants at TH’s headquarters and KL Sentral, alleged corruption by a former chief operating officer over renovation works, alleged document falsification involving rubber seedling supplies in Sandakan, and alleged misconduct at two TH Properties subsidiaries.
The Cabinet approved the declassification of the RCI report earlier today.
The RCI was established in 2021 to investigate TH’s management, operations and asset-related issues between 2014 and 2020, following concerns over its governance and financial position.
RCI uncovers ‘creative accounting’, political influence behind TH’s financial woes
Report traces the roots of the fund’s financial problems to political interference in board appointments, and unsustainable hibah payouts, among others.
The RCI report said that although Tabung Haji’s existing structure should be maintained, major reforms are needed in its management and operations to restore public confidence in the fund.
PETALING JAYA: The royal commission of inquiry has found that Tabung Haji (TH) concealed the true state of its finances for years, reporting a RM3.4 billion profit for 2017 when it should have recorded a RM1.4 billion net loss under proper accounting standards – a shortfall of nearly RM4.8 billion.
The six-member commission, chaired by former chief justice Raus Sharif, said the discrepancy stemmed from changes in impairment policies, unrecorded losses from troubled investments, and the use of “creative accounting” to justify annual profit distributions, or hibah, to depositors.
In its 252-page report submitted to the Yang di-Pertuan Agong on Aug 30, 2022, and declassified today, the commission traced the roots of TH’s financial problems to political interference in board appointments, unsustainable hibah payouts, and the national audit department softening its findings over concerns about depositor confidence.
Overall, the RCI concluded that a combination of excessive hibah commitments, questionable accounting practices, weak oversight, ambitious investment strategies and rising subsidy obligations placed significant financial pressure on TH.
High hibah payouts exceeded financial capacity, depleted reserves
The RCI said several TH chairmen and board members appointed between 2014 and 2018 were active politicians, and found that decisions on hibah rates, haj fees and financial assistance during that period were influenced by political considerations.
It said the minister overseeing TH also had unchecked authority to remove board members without cause – a power that was used to end the tenure of a CEO and chairman before the expiry of their terms.
The commission found that TH’s decision to maintain high hibah payments between 2014 and 2017 exceeded its financial capacity and depleted its reserves.
The attractive returns encouraged depositors to maintain large sums of money with TH, creating pressure on the institution to continue providing high payouts.
This exposed TH to the risk of significant withdrawals if hibah rates were reduced, as seen in 2019 when deposits fell from about RM73 billion to RM69 billion following the announcement of a 1.25% hibah rate.
To sustain high hibah payments, TH took on greater investment risks, with its portfolio becoming increasingly exposed to equities and market volatility.
‘Creative accounting’ masked TH’s financial losses
The RCI found that TH engaged in “creative accounting” by using Realisable Asset Value (RAV), instead of asset values reported in audited financial statements, to determine its ability to declare hibah payments.
This resulted in higher asset valuations and allowed larger distributions than TH’s actual financial position could support.
The commission also criticised the national audit department for failing to adopt a firmer stance in auditing TH’s financial statements between 2014 and 2017.
It noted that while the department issued a clean audit opinion for 2017 despite highlighting an “Emphasis of Matter”, it later admitted in a written response to the prime minister that it had avoided issuing a qualified opinion partly due to concerns over its potential impact on depositor sentiment.
The RCI said this compromised the department’s independence, and that a qualified opinion should have been issued.
Risky investments and growing financial pressures
Another contributing factor was TH’s expanded vision of becoming a “pillar of the ummah economy”, which led the institution beyond its original purpose of helping Malaysians save for and perform the haj pilgrimage.
The RCI found that TH ventured heavily into areas such as property and plantations despite lacking sufficient expertise, resulting in significant losses, particularly among its subsidiaries.
It also highlighted the growing burden of Haj Financial Assistance (HAFIS), which subsidises pilgrimage costs. The cost of performing the haj increased from RM15,553 in 2013 to RM25,540 in 2022, while TH’s subsidy burden rose from RM106 million in 2014 to RM300 million in 2019.
Although TH increased haj payments in 2022 through a two-tier system for B40 and non-B40 pilgrims, the commission warned that HAFIS costs could reach nearly RM400 million annually and potentially RM742.47 million by 2030.
As the subsidy is funded through TH’s investment profits, rising HAFIS costs could reduce funds available for hibah payments and affect depositor confidence.
Sweeping reforms needed to restore confidence
The RCI report said TH’s existing structure should be maintained, but warned that major reforms were needed in its management and operations to restore public confidence in the fund.
It recommended amendments to the Tabung Haji Act 1995 to establish clear criteria for board appointments and prevent active politicians from serving on the board.
It also proposed separating ministerial oversight, with the religious affairs minister responsible for haj operations while the finance minister oversees funds and investments.
Other recommendations include removing Bank Negara Malaysia’s regulatory role over TH, or limiting it strictly to reserve and liquidity matters, replacing the national audit department with a private audit firm for TH’s financial statements, and ensuring hibah payments are based solely on audited financial statements rather than internal valuations.
The RCI also called for forensic audits into 14 problematic investments, including TH Indo Plantations, Trurich Resources, and FGV Bhd, while proposing an increase in the minimum haj registration deposit from RM1,300 to RM12,980 to reduce the waiting period from 130 years to 33 years.
No comments:
Post a Comment