KUALA LUMPUR, July 14 — The Cabinet has agreed to set up a Royal Commission of Inquiry (RCI) over pilgrims’ fund Lembaga Tabung Haji (LTH) audit issues and allegations of mismanagement.

Deputy Prime Minister Datuk Seri Ismail Sabri Yaakob said the Prime Minister’s Department will identify a list of members for the RCI, consisting of experts in Shariah and civil laws, Islamic banking and investment.

Details regarding the establishment in terms of terms and references as well as RCI membership will be announced in the nearest future,” he said in a brief statement.

According to Ismail Sabri, the scope of the RCI will focus on the findings of the consultant on issues arising from LTH from 2014 to 2020 but does not include the Recovery Plan and LTH Restructuring which is being implemented at this time.

The RCI, when set up, will then determine if there are actions of covering up regarding the issues or any confusing statements about the matter and will recommend actions to be taken to those who are found responsible in three months.

“The establishment of this RCI is necessary so that further investigations can be made on the matters raised and appropriate recommendations can be submitted to the government to restore the image and confidence of the people in the authority of LTH.

“This is also to ensure a transparent and trustworthy internal investigation is carried out to ensure that LTH has carried out its mandate professionally in managing Muslims’ deposits,” he said.

The RCI will be formed under the Commission of Inquiry Act 1950.

Former minister in charge of Islamic affairs Datuk Seri Mujahid Yusof Rawa had previously alleged misconduct by TH’s previous management under former chairman Datuk Seri Abdul Azeez Abdul Rahim from Umno.

Mujahid had in 2018 cited a 2017 report by auditor PricewaterhouseCoopers that showed the fund to be balance-sheet insolvent as its RM70.3 billion in assets was RM4.1 billion less than prevailing liabilities.

The matter was brought up to the Cabinet meeting in August 18 last year, where the government said it will look into the implementation of RCI in terms of its terms of reference and legal implementation.

Following the RCI announcement, LTH Group director and chief executive officer Datuk Seri Amrin Awaluddin said the board members will give their full cooperation to the commission according to the law.

He believes the RCI will be able to help LTH improve in terms of management and governance aspects.

“The governance, integrity and reputation of TH as an Islamic financial savings institution is very important to ensure the confidence and interests of the public, especially depositors.

“TH has and always strives to implement processes to improve its operations and governance for the benefit of depositors,” he said in a statement this evening.