General : RCI TH: Hibah Paid To Depositors Valid Under Completed Contract - FT Mufti Dept

The Federal Territories Mufti Department clarified that hibah (profit) paid by Lembaga Tabung Haji (TH) to depositors during years of deficits between 2014 and 2020 was legally owned by the depositors. The department stated that the money was not considered unlawful or doubtful (syubhah) and was given under a hibah contract, fulfilling its transfer conditions.

The Haj performed by pilgrims using TH's hibah funds during this period remained valid and unaffected. The department published an article in the Tinta Mufti section of its website to clarify the issue, following the Royal Commission of Inquiry (RCI) report on TH's management and operations. The contract between depositors and TH was based on Wadi ah Yad Dhamanah, under which TH borrowed the money for investment and other purposes.

Any profit returned to depositors was a voluntary hibah. Once credited, it became the depositor's property, and TH's non-compliance with accounting standards or breaches of the law did not invalidate the hibah contract. The department emphasized that TH's shift to a Wakalah contract in December 2019, acting as an investment agent, would prevent imprudent practices, strengthen financial prudence, and ensure transparency.

The integrity scandal involving TH should prompt comprehensive reforms in the management of Islamic institutions in Malaysia.