Govt Tightens Financial And Investment Measures At Tabung Haji, Ensures Non-recurrence Of Crisis
By Nor Baizura Basri & Harizah Hanim Mohamed
KUALA LUMPUR, Aug 12 (Bernama) — The government’s pledge to leave no stone unturned in strengthening Lembaga Tabung Haji (TH) through stricter policy and regulatory measures to ensure that similar issues do not recur was among the messages at yesterday’s special Dewan Rakyat sitting.
The government explained how amendments to the Tabung Haji Act 1955 will be implemented in line with the Royal Commission of Inquiry (RCI) at the special sitting which lasted more than 10 hours.
Minister in the Prime Minister’s Department (Religious Affairs) Dr Zulkifli Hasan said a task force was established to examine the RCI’s findings and recommendations when tabling the report.
It will be headed by TH chairman Tan Sri Abdul Rashid Hussain and comprises Bank Negara Governor Datuk Seri Abdul Rasheed Ghaffour and Securities Commission (SC) chairman Datuk Mohammad Faiz Azmi.
“I was informed that the task force has agreed to recommend that the management of TH’s funds and investments be regulated by the SC, while matters relating to the management of the haj pilgrimage will be regulated by the Minister in the Prime Minister’s Department (Religious Affairs), with TH remaining as an intact entity.
“Further details of the recommendation will be provided to me for further consideration before being presented to the Cabinet for approval,” he said at the special sitting.
He also presented details concerning 14 troubled investments, efforts to prosecute those involved, and what TH’s financial situation would have been like had it not been rescued through a bailout, as well as panic withdrawals by depositors due to a loss of confidence at the time.
Zulkifli said TH’s losses had come close to RM13 billion, while the government faced the risk of assuming liabilities amounting to approximately RM74.5 billion in 2018 if large-scale panic withdrawals had occurred.
During the winding-up session, Finance Minister II Datuk Seri Amir Hamzah Azizan also detailed how seven of the 14 troubled investments had suffered 100 per cent losses, while TH’s investment in Putrajaya Perdana Bhd had indirectly drawn the institution into 1Malaysia Development Bhd (1MDB).
He stressed that the MADANI Government was not concealing anything, even when the figures were painful.
He also said accountability would be upheld without favouritism, with investigations to be carried out comprehensively. There will be no compromise shown towards any party found guilty.
“Tabung Haji is being strengthened so that history does not repeat itself. Act 535 will be amended to legally prohibit active politicians from serving on the board of directors; its investments will be regulated by the SC; hibah (profit distributions) will be based on audited accounts; and every decision concerning TH will be measured against one benchmark only – the interests of the ummah,” said Amir Hamzah.
Earlier, a total of 39 Members of Parliament were given five minutes each to debate the issue.
Among the proposals put forward was the establishment of a single regulator for large non-bank financial institutions (NBFIs), placing them under the same supervisory framework.
The proposal by Aminolhuda Hassan (PH-Sri Gading) covered major NBFIs such as the Employees Provident Fund (EPF/KWSP), Permodalan Nasional Bhd (PNB), Retirement Fund Incorporated (KWAP), the Armed Forces Fund Board (LTAT), and TH.
According to him, Malaysia currently does not have a single authority responsible for prudential supervision, systemic risk assessment and governance oversight of the non-bank financial sector.
Meanwhile, Bentong MP Young Syefura Othman (PH) called on the government to detail measures to reduce TH’s dependence on income from UJSB sukuk, which, according to the RCI Report, contributed nearly 26 per cent of the institution’s annual income.
The 211-page RCI report was made public on July 29. It contained various findings concerning weaknesses in the management and operations of the institution from 2014 to 2020.
The report also put forward 25 recommendations for improvements, 75 per cent of which had been implemented by TH as of July 30.
The government announced the establishment of the RCI in 2021, followed by the appointment of its members on Jan 20, 2022. The RCI report was subsequently presented to the Yang di-Pertuan Agong on Aug 30, 2022.
-- BERNAMA