Kuala lumpur: The Royal Commission of Inquiry (RCI) was crucial to determine whether Lembaga Tabung Haji's (TH) investment losses stemmed from weaknesses in investment decision-making or other factors, said Senator Muhammad Hasbi Muda. He said while losses were a normal part of investment activities and did not necessarily indicate criminal wrongdoing, the issues involving TH warranted a comprehensive examination given the number of troubled investments highlighted.
According to BERNAMA News Agency, Muhammad Hasbi, speaking on a recent talk show produced by a local television station alongside economist Professor Emeritus Dr. Barjoyai Bardai, stated that half of the 14 investments proposed for forensic audits had suffered 100 percent losses, while TH's financial position between 2014 and 2018 had also seen its liabilities exceed assets. He emphasized the need for the RCI to determine whether the losses were due to weaknesses in the investment panel or other underlying issues. He further explained that the misconduct in TH was systemic and difficult to determine through the usual methods.
Muhammad Hasbi elaborated that the term 'sakau' should not be viewed solely as the unauthorized taking of money or property for personal gain. He noted it could include improperly obtained benefits such as appointments, promotions, or other gains, as well as offenses including false claims and abuse of power.
Meanwhile, Barjoyai highlighted weaknesses in procedures, governance, and internal controls as issues that needed scrutiny when assessing TH's past problems. He expressed concern over how investments were valued, claiming they were carried out by TH's management and board of directors rather than through objective assessments by independent professionals.
The Malaysia University of Science and Technology (MUST) lecturer pointed out that investment impairment issues had occurred since 2014 and were flagged by auditor PricewaterhouseCoopers (PwC), but were not reported, even after warnings had been issued. He stated that objective valuations by an independent team could have mitigated these issues, reflecting institutional weaknesses in procedures, governance, and internal controls.
Barjoyai suggested that TH should reassess its investment management capabilities as part of reforms to prevent similar weaknesses from recurring. He proposed that if TH wanted to focus on managing pilgrims and haj affairs, its investment management function could be entrusted to other institutions like the Employees Provident Fund (EPF) or Permodalan Nasional Bhd (PNB). However, if TH chose to continue managing its investments, significant changes would be needed to ensure robust governance, procedures, and professional valuation methods.
The 252-page RCI report was made public on July 29 and debated during a special sitting of the Dewan Rakyat on August 11.