A review of Tabung Haji’s finances has shown that the fund is in worse condition that was initially suspected. According to the report, it will be unable to distribute dividends, or hibah, for several years due to liabilities severely outstripping assets.
Tabung Haji was found to be looking at losses totalling RM10.2 billion from its equity investments as of October 2018. Liabilities also outstripped assets by RM9 billion.
The report also highlighted a massive imbalance in depositors. Where some 50% of its deposits came from only 1.3% of its registered customers. One depositor was said to have left some RM190 million in the fund. Hoping to take advantage of the 8.5% dividends paid out over the last five years. Regular banking institutions were paying out an average of 3% dividends on average.
Minister in the Prime Minister’s Department Datuk Seri Dr Mujahid Yusof said that Tabung Haji had been illegally paying out hibah since 2014. As the Tabung Haji Act 1995 prevents the fund from paying out dividends if its liabilities are greater than its assets.
A proposal to remedy the issue is for the government to set up a Special Purpose Vehicle to take over management of Tabung Haji’s assets worth some RM20 billion. The idea is that this would relieve some pressure from the fund; giving it time to recover.
Additionally, the plan called for Tabung Haji to take on a short term borrowing of RM10 billion from Bank Negara. It would also be placed under the supervision of BNM.
