Kuala lumpur: The financial crisis facing Lembaga Tabung Haji (TH) might have been averted if the institution had acted on warning letters issued by Bank Negara Malaysia (BNM) regarding its financial position, reserve levels, and liquidity management since 2014. Minister in the Prime Minister's Department (Religious Affairs) Dr. Zulkifli Hasan highlighted this during a session in the Dewan Rakyat, underscoring the oversight that led to significant financial challenges.
According to BERNAMA News Agency, Dr. Zulkifli revealed that BNM had sent five warning letters to the TH Chairman and the responsible Minister between August 2014 and September 2016. Despite these alerts, the necessary corrective actions were not implemented, leading to a deterioration in TH's financial status. By the end of 2018, the asset-liability deficit had grown to approximately RM10 billion, resulting in a government bailout to prevent a larger crisis.
Dr. Zulkifli's comments were made during the winding-up debate at the Special Meeting of the Dewan Rakyat concerning the Royal Commission of Inquiry (RCI) Report on TH. He emphasized the RCI's perspective that TH should not have received a Clean Audit Certificate, suggesting that the issues labeled as "Emphasis of Matter" should have been declared as non-compliance.
BNM, in its role of ensuring financial stability, continuously monitors non-bank financial institutions, including TH. From their assessments, it was clear that the issues raised by BNM were not adequately addressed by TH since 2014. This neglect was evident in the declaration of dividends despite assets being less than liabilities, a practice contrary to Section 22 of the Tabung Haji Act. Additionally, the distribution of imprudent hibah continued until 2017, further exacerbating the financial situation.
Dr. Zulkifli assured that amendments to the Tabung Haji Act 1995 (Act 535) would be expedited to enhance governance. Forensic Auditing has been conducted on investments flagged in the RCI report, and the proposal for a Multi Agency Task Force to investigate risky investments is under consideration.
Overall, the government aims to investigate, enforce actions, recover assets, and strengthen laws to protect TH depositors' interests. Dewan Rakyat Speaker Tan Sri Johari Abdul thanked the Members of Parliament for their participation in the extensive debate on the RCI report, which spanned over 10 hours.
The session concluded with the understanding that further discussions could continue during the Third Meeting in October, allowing questions and clarifications to be addressed as needed.