KUALA LUMPUR, July 30 — Lembaga Tabung Haji (TH) should have posted a net loss of RM1.4 billion in the 2017 financial year, instead of the RM3.4 billion profit reported in its financial statements, according to the findings of the Royal Commission of Inquiry (RCI).
The RCI report published tonight found that had the Malaysian Financial Reporting Standards (MFRS) been fully applied for the 2017 financial year, TH would have recorded a net loss, indicating that the institution’s financial position was already critical at the time.
The report stated that the findings confirmed several matters highlighted by PricewaterhouseCoopers (PwC) in its financial review of TH’s position from 2014 to 2017, including the existence of a deficit between assets and liabilities since 2014.
According to the report, PwC found that TH had not carried out impairment assessments on investments in associated companies, investments and financing extended to subsidiaries, as well as fixed income instruments, while also failing to comply with the FRS 140 standard relating to the decline in the fair value of property investments.
The report also stated that TH had distributed profits (hibah) for the 2017 financial year without taking into account the impact of impairment and declines in the fair value of investments, while also recording dividend income from subsidiaries despite the dividends not being paid to TH.
The report highlighted several factors that contributed to TH’s financial crisis, including high hibah payments, accounting practices, the Auditor General’s lack of firmness, the addition of TH’s vision as a pillar of the ummah’s economy, and rising Haj Financial Assistance (HAFIS) liabilities. — Bernama
