Not financial or legal advice. Everything below comes from the declassified Royal Commission of Inquiry report and reporting on it. Findings are findings, and allegations in police reports are allegations. Nobody has been charged in court over any of this. Several matters remain under MACC investigation, so nothing here should be read as a conclusion about any individual.
Millions of Malaysians have a Tabung Haji account opened for them as children, and most never think about it beyond checking the hibah rate once a year.
That changed on July 29, 2026, when the Royal Commission of Inquiry (RCI) report finally went public, four years after it was first written.
Most of the coverage assumes readers already know what an impairment is. Here is the version that does not: one number at a time, with what each one actually means for depositors.
What is this report? The 1-minute version
A Royal Commission of Inquiry (RCI) is the most serious kind of investigation the government can order.
The Cabinet agreed to set this one up on July 14, 2021, the scope was fixed on 8 October, and six commissioners were appointed by the 16th Yang di-Pertuan Agong on Jan 20, 2022 with a six-month deadline.
Their job: examine how Lembaga Tabung Haji was run from 2014 to 2020. The report went to the Agong on August 30, 2022, then sat classified until the Cabinet released it on July 29 this year.
The version JAKIM published runs 211 pages: an executive summary, four chapters and a list of exhibits.
The RCI was chaired by former Chief Justice Tun Md Raus Sharif, with former Chief Secretary to the Government Tan Sri Samsudin Osman, RHB founder Tan Sri Abdul Rashid Hussain, Tan Sri Dr Mohd Munir Abdul Majid, UniSHAMS Vice-Chancellor Prof Dr Asmadi Mohamed Naim, and chartered accountant Norsyahrin Hamidon.
How they actually investigated it
Four methods: collecting records and documents, agency briefings, sworn witness declarations, and formal commission proceedings.
The commission identified 45 witnesses and took their evidence by statutory declaration, with 16 of them being called to testify in closed proceedings at Kompleks Islam Putrajaya.
The names called include two former ministers responsible for the fund, two former chairmen, and two former chief executives.
The commission also worked off existing reviews by PwC, Ernst & Young and Roland Berger. There’s one detail worth noting: the published report does not say what any of those witnesses told the commission.
The number everyone is sharing: RM4.8bil
For the 2017 financial year, Tabung Haji told depositors it made RM3.4 billion in profit. However, the commission found that if accounting standards had been followed properly, it would have shown a RM1.4 billion loss instead.
Line them up and the gap is about RM4.8 billion.
How does a gap that big happen? Mostly through something called impairment.
For example, if you buy an asset for RM100 million and it is now worth RM60 million, you are supposed to write down the RM40 million as a loss. The commission found that write-downs were not being taken.
| Financial year 2017 | Figure |
|---|---|
| What depositors were told | RM3.4 billion profit |
| What the RCI says it should have been | RM1.4 billion loss |
| Write-downs skipped, per Auditor General | RM227.81 million |
| From TH Heavy Engineering alone | RM164.58 million |
| Total losses by 2017, per PwC review | Around RM10 billion |
PwC was brought in after the Auditor General raised questions.
Its conclusion was blunt: the fund had owed more than it owned since 2014. In other words, the hole existed for years before anyone outside knew about it.
So how did it still pay hibah?
The law has a safety switch. Section 22 of the Tabung Haji Act 1995 says the fund cannot pay out profit unless its assets are worth at least as much as what it owes.
The commission found that from 2014 to 2017, management passed that test by using its own internal valuation of assets, which was higher than the audited figure.
Management argued the Act never defined “assets” clearly, so it had the right to decide how to calculate them. The commission called it creative accounting.
For 2017 the fund declared 4.5% hibah plus a 1.75% haj hibah. Total bill: RM2.75 billion.
The commission said that with a proper audit opinion, it should never have been declared at all.
Bank Negara then sent warning letters to the fund’s then chairman on August 21, 2014, December 19, 2014 and December 23, 2015 respectively.
Separately, an external consultant flagged financial trouble in 2017, and the commission found no record that the report was ever put in front of the board.
2019: When depositors started pulling out
Here is why generous payouts become a trap. Big hibah attracted people chasing returns, which the commission said pushed the fund away from its actual job. It also meant any drop in payout would spook everyone at once.
That happened in 2019, when hibah came in at 1.25%. Deposits fell from roughly RM73 billion to RM69 billion by year end. The commission said the fund got lucky that withdrawals were smaller than feared.
Between 2010 and 2017, staff bonuses ranged from two to 13 months of salary. In 2014 alone the bonus provision hit RM74 million: an 11-month performance bonus plus a two-month special bonus.
PwC later confirmed the fund was already in deficit when two of the biggest bonus provisions were set aside, in 2014 and 2015. The commission’s verdict: not justified. It wants the practice stopped, and it wants the improperly approved bonuses clawed back.
TH Properties Sdn Bhd also paid special appreciation bonuses of RM1.15 million in 2017 and RM1.05 million in 2018 to certain board members and officers.
The commission agreed these broke the Companies Act 2016: approved by a committee that had no mandate to approve them, without the shareholder resolutions required.
One person, 18 board seats
The commission called the governance problem systemic, and the numbers explain why. A former chief executive held positions in 18 subsidiaries.
A former chief financial officer sat in nearly two dozen. A former chairman held eight simultaneous chairman or director posts across subsidiary companies.
The commission’s finding: this caused a critical lack of focus on core duties and created severe conflicts of interest.
It also found the minister responsible at the time had expertise limited to religious matters, which left him relying entirely on the board and management for decisions worth billions.
And it noted that political appointments to the board between 2014 and 2018 caused unrest in the community, giving critics an opening and damaging the fund’s credibility.
After the change of government in May 2018, the existing investment panel was dissolved and replaced by a “business exco” chaired by the economic affairs minister.
The commission found this arrangement did not work effectively, and that it had no basis in the Tabung Haji Act 1995 as governance gaps showed up on both sides of the 2018 election.
The rescue: paying RM19.9b for RM9.7b of assets
By late 2018, something had to happen.
A committee from the Prime Minister’s Department, Bank Negara, the finance ministry and the fund looked at four options: government writes a cheque, government activates its guarantee, park the losses for later, or move the bad assets into a separate company.
A cheque above RM10 billion was too heavy for the national budget, the guarantee would only buy time. Parking losses clashed with accounting rules, thus paving the way for option four won the creation of Urusharta Jamaah Sdn Bhd.
The plan was approved in December 2018, which left under two weeks to pull it off before year end. The commission’s description: damage control, not a fix.
| Urusharta Jamaah, by the numbers | Figure |
|---|---|
| What it took over | 106 listed shareholdings, 29 properties, an estate in Sri Aman |
| Price paid | RM19.9 billion |
| What they were worth at the time | RM9.7 billion |
| How it paid | RM300 million cash, plus sukuk: RM10 billion at 4.05% and RM9.6 billion at 4.1%, due May 2029 |
| Total it now owes | RM27.5 billion |
| Loss recorded in 2019 | RM9.9 billion |
| Property taken at RM2.25 billion, worth at end-2021 | RM1.2 billion |
| Deferred income booked by end-2021 | Over RM2.1 billion |
| Position at end-2024 | Owns RM11.44 billion, owes RM23.86 billion |
The commission’s real point: the problem did not disappear, it changed address. Instead of Tabung Haji holding assets worth less than their price tag, Urusharta Jamaah now holds them, and has to repay RM27.5 billion.
Its first sukuk matured in May at about RM12.5 billion and was refinanced with a new RM11.5 billion issue at 3.825%, with the leftover RM965 million settled by handing over assets, including a Tun Razak Exchange land parcel.
14 investments now facing forensic audit
The commission said it found questionable transactions and concealment of information in several of the fund’s investments, and wants forensic audits on all of them.
Three of these are worth spelling out, because they are the ones with actual numbers attached.
TH Indo Plantations: US$178.6 million advanced
The fund sold its 95% stake to PT Borneo Pacific. The commission found the shares were transferred before full payment was received, and that the fund advanced US$178.6 million that the buyer was supposed to settle. The deal value was later cut from US$910 million to US$810 million.
Trurich Resources: US$58 million of Kalimantan estates
A police report alleges a land suitability study was manipulated, which misled Trurich, a joint venture with an FGV company, into buying oil palm estates in Kalimantan for around US$58 million in 2008 and 2009. The commission noted the investigation still needs cooperation from Indonesian authorities to finish.
TH Plantations: only 58% of the estates worked
Estates bought from 2012 to 2014 with borrowed money, including a RM1.2 billion sukuk. Only about 58% turned out productive, so assets were sold and upkeep cut to make repayments, which dragged yields down further. A RM170 million write-down followed.
4 police reports, 6 MACC cases, 0 charges
Internal investigations started in mid-2018. Four police reports followed: two on 30 November 2018, one on 13 December 2018, and one on 16 January 2019.
| Report | What it alleged |
|---|---|
| 30 Nov 2018 | Activities and use of money by Yayasan Tabung Haji believed to breach the foundation’s own governing documents. Referred to the AGC. |
| 30 Nov 2018 | Misrepresentation and concealment over the sale of the 95% stake in TH Indo Plantations. |
| 13 Dec 2018 | Manipulation of a land suitability study behind the Trurich estate purchases in Kalimantan. |
| 16 Jan 2019 | That the 2017 hibah declaration conflicted with Section 22. Police completed it and referred it to the AGC for a prosecution decision. |
None of the four produced charges at the time of writing.
What Tabung Haji says
Tabung Haji issued a statement the same day the report was released. Its position, in short: it welcomes the release, everything in the report predates 2018, and it has spent the years since fixing things. Here is the statement as issued.
Since then, TH has moved forward,” it said.
TH said it has implemented most of the recommendations outlined in the report to strengthen the institution.
“TH has implemented 75% of the RCI’s recommendations to improve the governance and well-being of the institution.
“The remaining recommendations are currently being implemented,” it added.
The pilgrimage fund also said it had restored its balance sheet, rebuilt its reserves and strengthened its financial position.
TH highlighted that its profit distribution had increased to 3.5%, its highest rate in eight years.
It also said the cost of performing the haj had remained at RM33,300 per person for three consecutive years.
TH remains committed to protecting the interests of depositors, strengthening public confidence and ensuring that the institution continues to operate with integrity and accountability.”
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