by Theleaders | July 30, 2026 1:16 pm
KUALA LUMPUR, July 30 — The government’s guarantee to depositors of Lembaga Tabung Haji (TH), currently worth RM88 billion, will be activated should TH fail to implement the LTH Recovery and Restructuring Plan 2018, according to the Tabung Haji Royal Commission of Inquiry (RCI).
In the RCI Report investigating TH’s management and operational issues from 2014-2020 released yesterday, the RCI said that the government should give serious consideration to the implementation of TH’s recovery plan to ensure the pilgrimage board achieves its goals.
“If LTH fails, the government’s guarantee (section 24 of Act 535) to depositors, which is currently worth RM88 billion, will have to be activated.
“In such circumstances, not only will TH bear the consequences but the government’s fiscal position will also be affected, and this will risk the country’s fiscal systemic stability,” the report said.
According to the RCI, sukuk instruments can be improved with a government’s guarantee.
In general, the RCI found that TH is exposed to strategic risks in the country’s financial ecosystem.
The issues faced by TH could lead to a larger national financial crisis and affect investor confidence in Malaysia, as well as the sustainability of the country’s economic growth and the pilgrimage board’s continued ability to carry out its functions, said the RCI.
“The commission is made to understand that urgent action needs to be implemented within a short period of time to restore TH’s financial position before the end of the 2018 financial year,” it said.
Meanwhile, to assess TH’s recovery plan, a special committee has been established comprising representatives from the Prime Minister’s Office, Bank Negara Malaysia, the Ministry of Finance, and TH’s senior management.
The committee has considered an effective plan based on four main pillars.
According to the RCI, the plan must protect the interests of nearly 9.3 million TH depositors at the time and ensure the continuity of TH’s main function, which is hajj management.
In addition, the outcomes of the formulated plan must restore TH’s ability to distribute profits (hibah) to its depositors in full compliance with Act 535.
The plan can mitigate the impact on the country’s fiscal position and avoid undermining economic stability, said the RCI.
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