This article is written purely for discussion, educational and thought-leadership purposes. It is based largely on publicly available information, published reports and statements, accounting standards, corporate governance and risk-management principles, Shariah governance frameworks and other relevant public sources.
All figures, thresholds, examples and scenarios presented are hypothetical and illustrative only. They do not represent TH's actual financial position, investment decisions, accounting treatment or internal governance unless independently verified from authoritative sources.
The views expressed are of personal observations and should not be interpreted as allegations, findings of fact, accusations of misconduct or conclusions against any individual, Board member, management, auditor, adviser or institution. It is not intended to influence, interfere with or prejudge any audit, forensic review, investigation, regulatory process or legal proceeding. The contents are not intended to undermine Muslims confidence in the institution. On the contrary, as a Muslim and a depositor, I recognise the immense importance of TH and the trust placed in it by millions of Malaysian Muslims.
It is equally important to acknowledge TH's significant achievements. In 2026, TH received the Labaytum Diamond Award from the Saudi Ministry of Hajj and Umrah for the fifth consecutive year, retaining the Diamond Award for the second consecutive year an international recognition of the excellence of Malaysia's Hajj management and services. This achievement reflects the professionalism, dedication and capability of TH's personnel in serving Malaysian pilgrims and should be recognised alongside any discussion on areas for improvement.
The suggestions are to encourage of how institution of such importance can continuously strengthen its governance, financial controls, investment discipline, accountability and depositor protection. Ultimately, the objective is simple - to help ensure that an institution entrusted with the savings, aspirations and Hajj journeys of millions of Muslims remains strong, trusted, professionally governed and worthy of that amanah for generations to come.
For me, Tabung Haji represents something much more fundamental - "Amanah".
The money deposited by millions of Muslims is not merely capital sitting in an investment portfolio. It represents years of savings, sacrifice and hope, money set aside by ordinary people with the intention of fulfilling one of the pillars of Islam.
That makes the responsibility of managing Tabung Haji fundamentally different.
As a depositor myself, I would naturally want my savings to generate a reasonable and sustainable return. But more importantly, I want to know that the institution managing those savings is being governed with integrity, professionalism, transparency and prudence.
I would rather receive a lower but genuinely sustainable hibah than a higher distribution achieved through excessive risk-taking, questionable valuations, accounting adjustments or decisions made for political or reputational reasons.
"Amanah" should come before optics. Sustainability should come before political expectations. Depositor protection should come before institutional prestige.
Therefore, if the issues highlighted by the RCI are ultimately established, I believe the discussion should not end with identifying who did what or who should be held accountable.
The more important question is:
What do we do to ensure that it never happens again, regardless of who is in government, who sits on the Board or who runs the institution?
Below is a possible framework, presented purely as a hypothetical governance and financial reform model. The figures used are illustrative only, intended to demonstrate how the controls could operate.
1. Separate Politics from Governance
The first reform should be the independence of the Board. There should be no active politicians on the Board. Board members should be appointed based on demonstrated competence in investment, finance, risk management, Shariah, governance and institutional management.
There should be:
Clear fit-and-proper criteria,
Fixed terms,
Transparent appointment processes, and
Strong restrictions on political appointments.
For example, an 11-member Board could comprise specialists in investment, finance, risk, Shariah, legal, governance and institutional management, with no active political office holders.
The RCI's recommendations in this direction are therefore important.
2. Make the Board Genuinely Accountable
The Board should have clear responsibility for:
Investment → Risk → Valuation → Financial Reporting → Hibah → Depositor Protection
Every major investment should have a documented decision trail.
For example, if TH makes a RM1 billion investment and it subsequently falls to RM500 million, the records should allow investigators to trace:
Proposal → Due Diligence → Risk Assessment → Investment Committee → Board → Approval → Monitoring → Warning → Corrective Action
If a RM500 million loss occurs, accountability should not disappear into a collective phrase such as "Board decision".
There must be a clear record of who recommended, who challenged, who approved and who monitored the investment.
3. Reform the Hibah Mechanism
This is perhaps one of the most sensitive issues.
Hibah should never become a political target or an expectation that management feels compelled to maintain regardless of financial circumstances.
For illustration only, assume TH generates:
RM3.0 billion investment income
Less:
RM500 million impairment,
RM300 million operating/Hajj-related requirements, and
RM200 million risk provision.
This leaves:
RM2.0 billion distributable surplus.
A possible framework could allocate:
RM1.5 billion → Hibah,
RM500 million → Retained reserve.
These are purely illustrative figures and not an official recommendation.
If the following year the distributable surplus falls to RM800 million, the hibah should be recalculated accordingly.
The principle is simple:
Do not borrow, manipulate valuations or weaken reserves merely to maintain a politically attractive hibah rate.
A lower but sustainable hibah is better than a high hibah that ultimately weakens the institution.
As a depositor, I can accept fluctuations in returns. What would concern me more is discovering that an attractive return today has compromised the financial strength of Tabung Haji tomorrow.
4. Establish an Independent Investment and Risk Committee
Create a genuinely independent Investment and Risk Committee, insulated from political influence.
For major investments:
Investment Proposal → Independent Valuation → Risk Assessment → Shariah Assessment → Legal Due Diligence → Conflict-of-Interest Declaration → Investment Committee → Board Approval
For illustration, a sample of approval limit table would be useful:
Below RM100 million → Normal internal approval,
RM100–RM500 million → Enhanced internal review,
Above RM500 million → Mandatory independent valuation and due diligence;
Above RM1 billion → Independent review plus full Board approval and enhanced risk assessment.
The exact thresholds should, of course, be calibrated to TH's actual portfolio size and risk profile.
5. Deal Aggressively with Related-Party Transactions
This is critical.
Any transaction involving:
Politically exposed persons,
Government-linked companies;
Board members,
Senior management,
Connected companies, or
Related investment managers
should receive enhanced scrutiny.
For example, if a RM300 million investment involves an entity connected to a Board member, that relationship must be disclosed before the investment is considered.
The principle should be straightforward:
If there is a conflict of interest, disclose it. If necessary, recuse. If the conflict cannot be properly managed, don't proceed.
6. Fix the Accounting Problem Permanently
The 2017 issue should be treated as a serious warning.
TH should have:
Independent valuation,
Proper impairment testing,
Conservative accounting,
Transparent disclosure,
Robust external audit, and
An independent Audit Committee.
Consider a hypothetical scenario:
Investment cost: RM1.0 billion Independent fair value: RM600 million
The RM400 million impairment should not simply disappear because recognising it would reduce reported profit or potentially affect hibah.
The accounting position should drive the investment and distribution decision not the desired hibah rate.
7. Conduct Forensic Reviews But Don't Stop There
Forensic reviews of investments such as Putrajaya Perdana should answer five fundamental questions:
Was the investment commercially justified?
Was due diligence adequate?
Was the valuation reasonable?
Was there a conflict of interest?
Did anyone benefit improperly?
For example, if a RM500 million investment was approved but subsequently valued at RM100 million, the investigation should establish whether the RM400 million deterioration resulted from:
Legitimate market risk,
Poor investment judgment,
Inadequate due diligence,
Negligence,
Conflict of interest; or
Deliberate misconduct.
These must not be conflated.
A bad investment is not automatically corruption. Negligence is not automatically fraud.
But if deliberate manipulation, abuse of position or personal benefit is established, that becomes a potentially serious legal matter.
8. Recover Whatever Can Be Recovered
For impaired assets, the approach should be:
Recover → Restructure → Dispose → Litigate where appropriate
For example, if a portfolio originally costing RM2 billion is currently worth RM1.2 billion, the objective should not automatically be to sell it for RM1.2 billion.
An independent recovery assessment might determine:
Immediate disposal: RM1.2 billion
while:
Restructuring + recovery over five years: Potential RM1.6 billion
Subject to risk, liquidity and market conditions, the latter may provide better value for depositors.
The objective should be maximum sustainable recovery for depositors, not political optics.
9. Make the 2018 Restructuring Completely Transparent
This is another area where public confidence matters.
Subject to legitimate commercial confidentiality, there should be disclosure of:
Original valuation,
Independent valuation,
Transfer price,
Consideration paid,
Assets transferred,
Subsequent performance,
Current valuation, and
Who approved the transaction.
For example:
Original valuation: RM1.0 billion Independent valuation: RM800 million Transfer consideration: RM1.0 billion Current valuation: RM1.3 billion Realised gain/loss: RM____
This would allow depositors and the public to assess whether the restructuring genuinely protected their interests.
10. Establish a Permanent Depositor Protection Framework
Ultimately, Tabung Haji exists for depositors and Hajj, not for politicians, management or investment bankers.
I would therefore establish a formal:
Depositor Protection & Sustainability Framework
For illustration, if TH had:
RM80 billion assets RM72 billion liabilities
the institution would have:
RM8 billion net position.
A framework could establish minimum buffers such as:
Minimum liquidity reserve,
Maximum single-investment exposure,
Minimum contingency/reserve buffer,
Mandatory stress testing under severe market scenarios, and
Defined limits on investment concentration and risk.
Again, these are illustrative figures, not proposed official TH thresholds.
The framework should cover:
Solvency → Liquidity → Investment Concentration → Risk Appetite → Impairment → Reserves → Hibah Distributions → Stress Testing
TH should also publish a simplified annual:
"Depositor Protection Report"
It should clearly explain:
Where the money is invested,
How much risk is being taken,
How much has been earned,
How much has been impaired,
How much has been recovered, and
How much can safely be distributed.
As a depositor, I should not have to be a financial analyst, auditor or investment banker to understand whether the institution entrusted with my savings is financially healthy.
The Most Important Reform
I would summarise the entire approach in one sentence:
Separate political authority from investment authority, separate management from oversight, and make every major financial decision traceable to the person or committee that made it.
But there is an even bigger lesson.
Don't design the reform around the people involved in the 2014–2020 period.
Design it so that the same problem cannot happen again, regardless of who becomes Prime Minister, Minister, Chairman, Board member or CEO.
That is the difference between punishment and governance reform.
As a Muslim, I see this not only as a corporate governance issue but also as an issue of "Amanah". And as one of the depositors, I have a personal stake in that "Amanah" being protected.
I do not expect Tabung Haji to make extraordinary returns every year. I expect it to be honest, prudent, professionally managed, Shariah-compliant, financially sustainable and worthy of the trust placed in it by millions of depositors.
The objective should therefore not merely be to discover who was responsible for yesterday's losses.
The real objective is to build a Tabung Haji where tomorrow's decision-makers cannot repeat them.
That, ultimately, is what genuine reform should achieve.
