KUALA LUMPUR, 15 JULY: The Cabinet has agreed to overhaul Lembaga Tabung Haji (Tabung Haji) in order to strengthen its operations and administration, according to the Ministry of Finance (MoF). According to the ministry, this will include a new operational model for the pilgrim fund, which will be examined jointly by the Prime Minister’s Department, the Ministry of Finance, Bank Negara Malaysia (BNM), and Tabung Haji.
Putrajaya also intends to list the institution as a specified Islamic financial institution under BNM’s jurisdiction under Section 223 of the Islamic Finance Services Act 2013, and will conduct a review of the Tabung Haji Act 1995 in order to do so.
“The aspect of Tabung Haji’s governance, integrity, and reputation as an Islamic finance savings institution is crucial to improve Tabung Haji’s financial position, to secure and protect the rights of Malaysian depositors and hajj pilgrims,” according to the statement. “As stated in the Tabung Haji Act 1995, depositors’ savings remain safe and secured by the government,” it added.
The decisions were made during a meeting of the Cabinet on Wednesday (July 14).
On Wednesday evening, Deputy Prime Minister Datuk Seri Ismail Sabri Yaakob said that the government would establish a Royal Commission of Inquiry (RCI) to probe Tabung Haji concerns under the Commissions of Enquiry Act 1950 (Act 119).
“However, as decided by the Cabinet on July 14, 2021, this commission’s scope will not include the continuing revamp and restructuring efforts that are being undertaken to improve Tabung Haji’s audit findings by consultants from 2014 to 2018, as well as the recovery measures undertaken by the pilgrim fund up until 2020,” the MoF said today.
Tabung Haji has been undergoing reorganization efforts since 2018, after the Pakatan Harapan administration discovered the fund had more liabilities than assets due to heavy equity market exposure and multiple failed business operations.
Tabung Haji’s assets increased by 8.7% each year on average from RM54.7 billion to RM70.4 billion between 2014 and 2017. However, according to consultants’ conclusions in 2018, the fund’s net asset fell to RM64.6 billion, which was below its entire liabilities of RM75.5 million at the time, necessitating the reorganization in order for the fund to continue paying hibah to depositors./n
