The TH RCI Findings: A Systematically Broken Institution

Politics & Governance Calculating...

JoeGetz
31 Jul 2026
48
SubCategory | Government Policies

by JoeGetz, 31 July 2026

The TH RCI Findings: A Systematically Broken Institution

The 252-page RCI report paints a devastating picture of an institution that drifted dangerously off course ⁷. The findings can be grouped into several critical areas of failure:

1. Governance: Weak Laws and Weaker Oversight

The RCI found that the Tabung Haji Act 1995 (Act 535) was fundamentally flawed and no longer suited to current needs ^1,10. The Act conferred "broad powers" to the Minister over haj operations, funds, and investments ¹. This concentration of authority created a governance vacuum.

Ministerial Power and Lack of Expertise

The Minister responsible for TH during the period was the Minister in the Prime Minister's Department (Religious Affairs). The RCI noted that the expertise of the three Religious Affairs Ministers who oversaw TH during the investigation—Major General (Rtd) Datuk Seri Jamil Khir Baharom, Datuk Seri Dr Mujahid Yusof Rawa, and Datuk Dr Zulkifli Mohamad Al-Bakri—was confined to religious affairs ^1,4.

"The situation might have been different if matters relating to TH's fund management and investments had been placed under the responsibility of the Finance Minister," the report said ^1,4.

Board Appointments: Politicians at the Helm

Act 535 empowered the Minister to appoint the Chairman and Board members, but it did not prescribe specific criteria beyond requiring them to be Muslims and Malaysian citizens ^1,4. The RCI found that "such broad provisions resulted in the appointment of a TH Chairman and several Board members from among politicians during the 2014 to 2018 period" ¹.

Among those named was Datuk Seri Abdul Azeez Abdul Rahim, who chaired TH from July 2013 to May 2018 while serving as Baling Member of Parliament ^8,9. Other former board members named included Tan Sri Badruddin Amiruldin and Datuk Rosni Sohar ⁸.

2. Transparency and Compliance: The "Creative Accounting" Scandal

Perhaps the most damning finding concerns the use of "creative accounting practices" to justify unsustainable hibah (profit distributions) between 2014 and 2017 ¹⁵.

The Realisable Asset Value (RAV) Loophole

TH relied on Realisable Asset Value (RAV) rather than audited financial figures to determine compliance with Section 22 of the Act, which prohibits payouts when liabilities exceed assets ^3,15. The use of RAV inflated TH's asset values above those reported in its audited accounts, while no impairment adjustments were made for investments that had declined in value ¹⁵.

The most striking example: In 2017, TH reported a profit of RM3.4 billion to support its dividend distribution. However, under Malaysian Financial Reporting Standards (MFRS), the fund had actually recorded a net loss of RM1.4 billion ^3,15.

Audit Failure

The RCI also identified the National Audit Department's (NAD) lack of firmness as a key factor ¹⁵. Although the 2017 audit contained an "emphasis of matter," TH's financial statements from 2014 to 2017 were still issued with unqualified audit opinions ¹⁵.

The RCI found that the Auditor General had initially proposed a qualified audit opinion but decided against it due to concerns that it "could undermine stakeholders' confidence, particularly among depositors" ¹⁵. The commission said this showed the AG had taken into account "considerations beyond the scope of the audit" ¹⁵.

3. Investment Policy: Drifting from the Mandate

The RCI found that TH had drifted away from its original mandate as a savings institution for pilgrims and had increasingly positioned itself as a "pillar of the ummah economy" ⁷. This resulted in aggressive expansion into property, plantations, and other ventures where it lacked expertise ⁷.

Conflict of Interest and Overextension

The RCI found that TH Board members and senior management held multiple appointments across TH's subsidiaries, reducing focus on core responsibilities and creating serious conflicts of interest ^1,8,9.

The report named Datuk Johan Abdullah, a former chief executive, who held positions in 18 subsidiaries, while Datuk Rozaida Omar, the chief financial officer, was present in nearly two dozen subsidiaries ⁹. Former CEOs Tan Sri Ismee Ismail, Datuk Seri Johan Abdullah, Datuk Seri Zukri Samat, Datuk Nik Mohd Hasyudeen Yusoff, and incumbent CEO Datuk Seri Amrin Awaluddin all held positions in various TH subsidiaries during their tenures ⁸.

4. The Financial Crisis: The RM20 Billion Rescue

The consequences of these failures were catastrophic. At the end of 2017, TH's assets were valued at RM70.3 billion against liabilities of RM74.4 billion ⁷.

The government was forced to mount a RM19.6 billion rescue through a government-owned Special Purpose Vehicle, Urusharta Jamaah Sdn Bhd (UJSB), which took over impaired assets ^3,7.

5. Bonus Excesses: The Indignity of Rewarding Failure

The RCI found that TH staff received unusually high bonuses of up to 13 months' salary, with RM74 million paid out in 2014 even though the fund's liabilities had already exceeded its assets ⁷. Additionally, TH Properties Sdn Bhd paid RM2.19 million in special bonuses to directors and selected officers in 2017 and 2018, citing profits from an Australian project ⁷.

The Structural Enablers: Why This Happened

Flawed Legislation

The RCI concluded that Act 535 enabled the crisis by allowing the Minister to appoint and remove Board members at will, without reason, and without requiring specific financial expertise ^1,10,13. The Minister exercised this power in two instances, including the termination of CEO Datuk Nik Mohd Hasyudeen Yusoff on May 5, 2021, before the expiry of his term, and the termination of Chairman Tan Sri Md Nor Md Yusof on October 15, 2021, before the expiry of his renewed term ^1,13.

Political Interference

The RCI found that political elements drove key decisions on hibah distributions, haj fees, and financial support ^1,9. This was particularly acute in the lead-up to the 2018 General Election. An external consultant report flagging financial troubles in 2017 was "unfortunately" ignored by management amid political pressure ⁹.

Recommendations: A Roadmap for Reform

The RCI made 25 recommendations for reform ². Key proposals include:

Governance and Legislative Reform

1. Amend Act 535 to modernise the legal framework, introduce statutory requirements for board appointments, and prohibit active politicians from serving as Chairman or Board members ^2,10.

2. Establish an independent advisory committee to make recommendations on the appointment and removal of board members ².

3. Remove the Minister's unilateral power to terminate board members without reason ¹⁰.

4. Codify the Investment Panel, Syariah Advisory Committee, and Haj Management Committee under the Act, rather than allowing them to exist through administrative arrangements ^1,10.

Restructuring Ministerial Oversight

5. Separate responsibilities: The Haj management should be under the Minister in the Prime Minister's Department (Religious Affairs), while financial, fund, and investment management should be under the Finance Minister ^1,2.

6. The Securities Commission Malaysia should regulate TH's investment functions ⁶.

Limiting Conflicts of Interest

7. Limit the involvement of TH Board members and senior management in its subsidiaries ^2,8.

8. Define clear criteria for board appointments, specifying required areas of expertise and prohibiting active politicians ^2,10.

Investment Reform

9. TH should focus on managing funds and avoid high-risk investments classified as "strategic investments" ².

10. Establish a dedicated Haj Fund department under TH to manage depositors' funds, registered and licensed under the Securities Commission ⁶.

The Accountability Question: Who Must Be Held Responsible?

The RCI findings are comprehensive, but accountability cannot stop at recommendations. Actions must follow.

Immediate Steps

1. Forensic Audits

The RCI has specifically recommended forensic audits of past investments to determine how decisions were made that resulted in severe asset devaluation. Among the investments identified are:

TH Indo Plantations
Emrail
Wellspring Worldwide
Deru Semangat
Trurich Resources
Abraj
Putrajaya Perdana
Al-Rawda
Al-Fareeda Residential Fund
TH Plantations
TH Properties
Alam Maritim Resources/TH Marine
TH Hotel & Residences
FGV Berhad ¹²

2. Police and MACC Investigations

Parti Amanah Negara has already demanded "swift police and MACC probes" into the RCI findings ¹². The RCI confirmed that several matters were referred to the MACC, including allegations of corruption, misappropriation, and falsification of documents ¹².

3. Criminal and Civil Liability

Individuals named in the report—including former Chairmen, Board members, CEOs, and senior management—must be investigated for potential breaches of the law. The RCI's findings of "creative accounting," conflicts of interest, and the violation of Section 22 of the Act potentially amount to criminal conduct.

The Principle: No One Is Above the Law

The RCI report is clear: the crisis was not an accident. It was the result of deliberate decisions, political interference, and a culture of impunity. The perpetrators must be held accountable regardless of their title, community standing, or political affiliations ¹².

This includes:

Datuk Seri Abdul Azeez Abdul Rahim, Chairman (2013-2018) ⁸
Tan Sri Badruddin Amiruldin, Board member ⁸
Datuk Rosni Sohar, Board member ⁸
Datuk Johan Abdullah, CEO who held positions in 18 subsidiaries ⁹
Datuk Rozaida Omar, CFO who held positions in nearly two dozen subsidiaries ⁹
Tan Sri Ismee Ismail, former CEO
Datuk Seri Zukri Samat, former CEO
Datuk Nik Mohd Hasyudeen Yusoff, former CEO
Datuk Seri Amrin Awaluddin, incumbent CEO
The three Religious Affairs Ministers who oversaw TH during the period ⁴

Beyond Individuals: Systemic Accountability

Individual accountability is necessary but insufficient. The RCI's recommendations on legislative reform must be implemented immediately. The Tabung Haji Act must be overhauled, and the separation of ministerial responsibilities must be codified into law.

The Political Dimension: A Referendum on Integrity

As one analyst noted, the Tabung Haji RCI has "transformed Malaysia's political landscape in ways that extend far beyond the Negeri Sembilan state election" ⁵. It has become "a referendum on governance, institutional integrity and the stewardship of some of Malaysia's most important public institutions" ⁵.

The electorate must not be distracted by 3R issues—race, religion, and royalty—used by perpetrators to sideline the real issues. This is about trust. This is about accountability. This is about whether Malaysia's institutions serve the people or serve the powerful.

As the analyst concluded, "The true legacy of the Tabung Haji RCI should not be partisan advantage. It should be the strengthening of Malaysia's institutions so that public trust, once broken, can be restored through transparency, professionalism and accountability rather than political rhetoric alone" ⁵.

Conclusion: A Nation Demands Justice

The Tabung Haji RCI report is a damning indictment of a system that allowed a sacred trust to be looted. The revelations of political interference, "creative accounting," conflicts of interest, and massive financial losses are not just historical footnotes—they are a call to action.

The people must demand that the recommendations be implemented. The MACC and police must conduct thorough investigations. Perpetrators must face the full force of the law. And the Tabung Haji Act must be reformed to ensure that this never happens again.

For millions of depositors who trusted TH with their lifelong dream of performing the haj, this is not just about money. It is about dignity. It is about trust. And it is about the fundamental principle that no one—not a politician, not a CEO, not a Board member—is above the law.

The time for accountability is now.

Credit: The STAR

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