KUALA LUMPUR, July 30 — Weak governance, including political interference in the management of Tabung Haji (TH) and the distribution of its profits, was among the key findings of the Royal Commission of Inquiry (RCI) into the pilgrim fund’s operations from 2014 to 2020.
The RCI report, released tonight, found that political involvement in TH’s management between 2014 and 2018 had fuelled public concern amid political rivalry.
According to the report, the situation allowed certain parties to exploit decisions made by TH as a subject of criticism, undermining the institution’s credibility.
“There were several TH decisions, such as the payment of profit distribution (hibah), the determination of haj charges, and Hajj Financial Support (HAFIS), that were driven by political elements,” the report said.
The report also found that the situation stemmed partly from weaknesses in the Tabung Haji Act 1995 (Act 535), which it said was no longer suited to current needs as it conferred broad powers to the Minister over haj operations, funds and investments.
The Commission also took the view that the provision under Act 535 empowering the Minister to terminate the appointment of any Board member at any time without giving any reason was no longer appropriate under the current circumstances.
“The Minister exercised this power in two instances, including the termination of Datuk Nik Mohd Hasyudeen Yusoff’s service as Chief Executive Officer on May 5, 2021, before the expiry of his actual term on Aug 31, 2021.
“It also exercised the power to terminate the appointment of Tan Sri Md Nor Md Yusof as Chairman of the Board on Oct 15, 2021, before the expiry of his renewed two-year term, which commenced on July 20, 2020,” the document said.
The RCI also found that the involvement of TH Board members and senior management in its subsidiaries had reduced their focus on their core responsibilities at TH and created conflicts of interest in the management of the institution and its subsidiaries.
Following these findings, the Commission recommended amendments to Act 535 to strengthen TH’s governance and regulatory framework, as well as a restructuring of its governance to place haj management under the Minister in the Prime Minister’s Department (Religious Affairs), and financial, fund and investment management under the Finance Minister.
The RCI also recommended that the Investment Panel, Syariah Advisory Committee and Haj Management Committee be expressly provided for under Act 535 to further strengthen TH’s governance. — Bernama
