Kuala lumpur: The Royal Commission of Inquiry (RCI) into Lembaga Tabung Haji (TH) has recommended the establishment of a dedicated department known as the Haj Fund under TH to manage depositors' funds, with oversight by the Securities Commission Malaysia (SC) to enhance investment management professionalism.

According to BERNAMA News Agency, the RCI emphasized that this move would allow TH to retain its investment management functions rather than being placed under a separate subsidiary. In its report released yesterday, the RCI proposed that the Haj Fund be established as a dedicated department under TH, as provided under the Tabung Haji Act 1995 (Act 535), and regulated by the SC to ensure stronger governance and oversight.

The report specified that the Haj Fund should manage and invest depositors' funds to generate stable returns and must be registered or licensed under the SC. The RCI also recommended that TH's investment functions be regulated by the Finance Minister and the SC, while the appointment of members of the Investment Panel overseeing the Haj Fund should fall under the Finance Minister's authority.

The TH Board would be responsible for appointing senior officers, including the chief investment officer, who would be supervised by the SC. To prevent confusion, the RCI stressed that the Board would not have the authority to direct investment decisions involving the Haj Fund.

As a department under TH, the Haj Fund would be required to provide regular and systematic performance reports to the Board, while the Audit Department and Audit Committee should be given access to relevant financial documents and information. The RCI stated that this structure is necessary to enhance professionalism, especially given TH's deposits, which currently stand at RM88 billion and are expected to reach RM100 billion within two years.

The RCI further recommended that the Haj Fund establish an experienced domestic and international investment team, while its international portfolio could be managed by external fund managers. TH was also advised to strengthen its portfolio management by setting a vision to become a leading fund management institution focused on achieving higher returns.

The report concluded by stating that comprehensive measures are needed to strengthen TH's business and investment model, including improving governance through professional management without political interference. This would require the commitment and support of all stakeholders to ensure TH's long-term sustainability.