RCI: TH crisis stems from years of weak governance, political interference

The financial crisis at the Malaysia-based Tabung Haji (TH) was caused by a combination of weak governance, political interference, poor investment choices, and the inability to accurately portray the organization's financial situation, according to a report by the Dewan Rakyat. Dr Zulkifli Hasan, a minister in the Prime Minister's Department, stated that the crisis was the result of accumulated issues over a decade, with key factors including poor governance, specifically in leadership appointments, and interference by certain groups.

He emphasized that the crisis was not sudden but a long-term accumulation of problems, including corruption, risky investments, and lack of transparency in financial reporting. The Royal Commission of Inquiry (RCI) made several recommendations, including a thorough review of the Tabung Haji Act 1995, stricter eligibility criteria for board members, and a ban on active politicians holding TH leadership positions.

The government has since acted on these recommendations, ensuring that TH's leadership meets integrity, competence, ability, and experience standards. TH's financial reporting has also been strengthened, with financial statements prepared in line with accounting standards since 2018 and profits based on audited figures since 2022.

The government is currently reviewing amendments to the TH Act to further enhance accounting standards and penalties for misreporting. Despite the challenges, Tabung Haji will continue to operate as a single entity under the oversight of the minister responsible for religious affairs.