The Tabung Haji report: four years in a locked drawer

On Wednesday, JAKIM quietly uploaded a PDF that the government had sat on since August 2022. The royal commission of inquiry into Tabung Haji, chaired by former chief justice Md Raus Sharif, handed its report to the Agong four years ago. It stayed classified until now. The prime minister's explanation for the delay was blunt: publishing it earlier might have panicked depositors into pulling their money out.

That explanation is itself the story. Tabung Haji holds RM88 billion belonging to 8.6 million depositors, and every ringgit of it is guaranteed by the federal government. If the fund fails, the bill lands on the national budget. There are few institutions in the country where bad governance costs ordinary people more directly.

Profits that were not there

The report's central finding is an accounting one. For 2017, Tabung Haji declared a profit of RM3.4 billion and paid depositors a generous return on the back of it. The commission went through the books and concluded that, had the standard accounting rules been applied in full, the fund would have recorded a net loss of RM1.4 billion that year. A swing of nearly RM5 billion between what was reported and what was real.

How do you report a profit that size while insolvent? The fund valued its assets using something called realisable asset value instead of the figures in its own audited statements, on the argument that the law never defined the word asset. Investments that had collapsed in value were carried at hopeful numbers. The commission calls this out plainly, and the press has settled on the report's own phrase for it: creative accounting.

The auditor general's office does not escape either. The commission quotes a letter admitting that a qualified opinion was drafted for the 2017 accounts and then softened, partly out of worry about how depositors would react. The watchdog blinked at exactly the moment it was needed.

The politics in the machine

Why did nobody stop it? The commission's answer keeps returning to who was in the room. The law requires only that a board member be Muslim and Malaysian. Nothing about financial competence. Between 2014 and 2018 the chairmanship and several board seats went to active politicians, and the commission found that decisions on the annual payout, hajj fees and hajj subsidies carried political fingerprints. The minister could also sack any board member at any time without giving a reason, and did, twice, before their terms were up.

The payouts followed the incentives. Distributions from 2014 to 2017 ran beyond what the fund could afford and drained its reserves, because a generous hibah is popular and a prudent one is not. When the rate was finally cut to 1.25 percent for 2019, deposits shrank by RM4 billion. Meanwhile staff bonuses in the crisis years reached thirteen months of salary, and a subsidiary paid RM2.2 million in special bonuses to its own directors without shareholder approval.

The rescue, and who paid for it

The 2018 rescue moved the fund's worst assets into a special purpose vehicle, Urusharta Jamaah, at RM19.9 billion. Their market value at the time was RM9.7 billion. The RM10.2 billion gap did not vanish; the Cabinet later committed RM17.8 billion of public money, roughly RM1.73 billion a year, to make the sukuk issued in exchange whole. Today about a quarter of Tabung Haji's annual income is accruals on those sukuk. The commission names the failure of this arrangement as the single largest risk the fund carries.

Why this belongs on an election site

Strip the accounting away and the commission's main fix is about personnel. Bar active politicians from the board. Write competency requirements into law. Let an independent body, not a minister, decide who runs an RM88 billion institution. Every recommendation is a version of the same idea: the people you put in charge decide what the institution becomes.

That is also the question on every ballot paper. A vote is an appointment decision, and Tabung Haji is what an appointment decision looks like when it goes wrong for years in a row. Worth remembering: four police reports and six MACC referrals came out of the scandal, and as of the report's writing, not one had produced a charge. The Cabinet has now ordered fresh investigations. Whether anything comes of them is a story we intend to follow.