TH faced risk of RM74.5 billion liability exposure before bailout, Dewan told
TABUNG Haji (TH) faced the possibility of a massive financial crisis in 2018, with the government potentially exposed to liabilities of up to RM74.5 billion if a large-scale panic withdrawal had taken place, the Dewan Rakyat was told today. Minister ...
In 2018, TABUNG Haji (TH) was on the brink of a financial crisis, with the potential for up to RM74.5 billion in liabilities should a widespread panic withdrawal occur, according to the Dewan Rakyat. Minister in the Prime Minister's Department (Religious Affairs) Dr Zulkifli Hasan revealed that the situation could have materialized in 2019, when TH experienced RM6 billion in net withdrawals following the declaration of a 1.25% hibah payout for the 2018 financial year.
Dr Zulkifli emphasized that TH was technically insolvent at the time, necessitating urgent intervention to avert further deterioration. The government's response was a restructuring exercise, which entailed a bailout of over RM10 billion to bolster TH's financial standing. This intervention aimed solely at rescuing TH, not taking over its assets, refuting claims that assets were sold to non-Muslims or the Chinese community.
The financial strain had led TH's fourth-quarter 2018 position to be critical, with the disparity between assets and liabilities surpassing RM10 billion, leaving only three months to implement a solution. Dr Zulkifli underscored the urgency of the restructuring, which sought to restore TH's financial stability and ensure its continued sustainability in managing Malaysian pilgrims' affairs.
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