5 kali BNM beri amaran, TH tetap bayar agihan tinggi

Bank Negara Malaysia (BNM) issued five warnings to Lembaga Tabung Haji (TH) since 2014 regarding the risk of paying high profit dividends that could weaken the financial position of the institution. Deputy Prime Minister and Minister in the Prime Minister's Department for Religious Affairs, Zulkifli Hasan, stated that the central bank has been particularly attentive to the impact of high dividend payments on TH's financial situation, which has been low.

He said the situation risks making TH's reserves negative and exposing the institution to major problems if large withdrawals occur by depositors. "BNM has raised concerns about the practice of paying high profit dividends, which has caused TH's already low reserves to become negative," he said during his explanation of the findings by the Royal Malaysian Commission of Inquiry (RCI) on TH in the Dewan Rakyat.

He said five warning letters were sent by BNM to the TH chairman and the responsible minister at that time, including about the gap between TH's assets and liabilities. "They have been warned not once, not twice, but five times that the situation needs to be rectified immediately to ensure TH does not continue to violate the law," he said.

The minister said the warnings have not been heeded, with TH's asset-liability deficit exceeding RM10 billion in the fourth quarter of 2018. According to him, the situation has put TH at risk of large-scale cash outflows, while efforts to obtain financing have failed if a "bank run" occurs. "If TH collapses, the government faces a liability of around RM74.5 billion because all deposits in TH are fully guaranteed by the government," he said.

Zulkifli said the crisis was also exposed by the findings of the Auditor General in TH's 2017 financial statements, including the two changes in TH's depreciation base made in the same year. He said the changes allowed TH to report higher profits for 2017. The consequences of the government change in 2018 saw a new TH supervisory body appoint accounting firm PricewaterhouseCoopers (PwC) to reassess the institution's financial standing and performance based on accounting standards used.

Zulkifli said the PwC report confirms financial assessment issues, including TH's valuation of assets worth only RM556 million out of its total RM4.6 billion assets. He said the relevant action was taken to allow TH to announce high profit dividends despite its poor financial performance and the institution's insolvency. "This decision is a clear violation as TH pays high dividends while the gap between its assets and liabilities has clearly exceeded the provisions of the Tabung Haji Act," he said.

He said the RCI later recommended reforms in management, financial reporting, and investment management of TH, with over 75% of recommendations already implemented. The Dewan Rakyat held a special session today to discuss the RCI report covering TH's management and operations from 2014 to 2020, including mismanagement, political interference, and excessive dividend payouts without accounting for depreciation and careful investment returns.

The RCI also found TH should record a net loss of RM1.4 billion in 2017, not the reported profit of RM3.4 billion, if the Malaysian Financial Reporting Standards (MFRS) were fully applied.