Kuala Lumpur: The government rescued Lembaga Tabung Haji (TH) through a bailout exceeding RM10 billion due to mismanagement and embezzlement, to restore its financial position and not to take over the institution's assets, the Dewan Rakyat was informed on Tuesday.
Minister in the Prime Minister's Department (Religious Affairs), Zulkifli Hasan (pic), also emphasised that no assets were sold to non-Muslims or Chinese, as falsely claimed by some irresponsible parties seeking to incite hatred and provoke the public.
The assets are owned by Urusharta Jamaah, a wholly-owned company of the Minister of Finance Incorporated, he noted.
He said this during the minister's briefing session on the Royal Commission of Inquiry (RCI) Report on TH and the efforts and actions taken to restore the financial position of the institution at the Special Sitting of the Dewan Rakyat on TUesday.
He said TH is facing a critical situation where the deficit gap between TH's assets and liabilities has widened to over RM10 billion in the fourth quarter of 2018, with only three months to find a solution.
"At that time, TH was insolvent and needed to be rescued.
The situation ultimately forced the Pakatan Harapan Government to bail out TH with a restructuring plan to restore its financial position so that TH could become solvent again and remain sustainable in the long term," he said.
Zulkifli said that the TH crisis did not happen overnight; rather, it was the cumulative result of greed and embezzlement, governance weaknesses, interference by certain interests, risky investment decisions, and a failure to transparently reflect its financial position.
He added that the recovery and institutional reform plan implemented by TH since 2018 had successfully produced positive results.
"All the reforms implemented have clearly resulted in a more sustainable strengthening of TH.
The evidence is clear as the restructuring of assets and liabilities has successfully restored TH's financial position.
"In addition, TH has also been able to clean up its balance sheet and rebuild a stronger financial reserve," he said.
Zulkifli said that TH had successfully recorded its highest investment income in history, amounting to RM4.64 billion in 2025, resulting from improved investment quality and strengthened governance and transparency in institutional management.
TH has also demonstrated its commitment to prioritising the interests of depositors by successfully increasing the profit distribution rate progressively, from 1.25 per cent in 2018 to 3.5 per cent in 2025, marking the highest rate in eight years, even after accounting for RM2.6 billion in problematic legacy assets that needed to be written down from 2018 to 2025.
He said that under the leadership of the chairman, the Board of Directors, and a professional and credible management team, TH has now successfully returned to a more solid and sustainable path through the implementation of strategic plans, reforms, and better governance, without government intervention.
On July 29, a 211-page RCI report was made public, containing various findings related to the management and operational weaknesses of the institution during the period from 2014 to 2020.
The RCI report also put forward 25 recommendations for improvement, 75 per cent of which had been implemented by TH as of July 30.
The government announced the establishment of the RCI in 2021, followed by the appointment of RCI members on Jan 20, 2022, after which the RCI report was presented to the Yang di-Pertuan Agong on Aug 30, 2022.
