RCI uncovers ‘creative accounting’, political influence behind TH’s financial woes

PETALING JAYA : The royal commission of inquiry has found that Tabung Haji (TH) concealed the true state of its finances for years, reporting a RM3.4 billion profit for 2017 when it should have recorded a RM1.4 billion net loss under proper accounting standards – a shortfall of nearly RM4.8 billion. The six-member commission, chaired by former chief justice Raus Sharif, said the discrepancy stemmed from changes in impairment policies, unrecorded losses from troubled investments, and the use of “creative accounting” to justify annual profit distributions, or hibah, to depositors.

In its 252-page report submitted to the Yang di-Pertuan Agong on Aug 30, 2022, and declassified today, the commission traced the roots of TH’s financial problems to political interference in board appointments, unsustainable hibah payouts, and the national audit department softening its findings over concerns about depositor confidence.

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