Tabung Haji faced RM1.4 billion loss if MFRS standards were used in 2017

Lembaga Tabung Haji (TH) faced scrutiny over its 2017 financial reporting, with a Royal Commission of Inquiry (RCI) finding that the institution did not fully adhere to Malaysian Financial Reporting Standards (MFRS). Had MFRS been applied consistently, TH would have recorded a net loss of approximately RM1.4 billion for the fiscal year 2017, a stark contrast to the reported net profit of RM3.4 billion.

The RCI highlighted that TH's use of the Realisable Asset Value (RAV) method for assessing assets was inconsistent with Section 22 of the Tabung Haji Act, as RAV was not recorded in the audited financial statements. Furthermore, the commission noted that TH's profit distribution approach from 2014 to 2017 violated Section 22 of the Act, as distributions were made from depositors' funds rather than actual profits. This practice reportedly widened the asset-liability deficit from RM352 million to RM4.093 billion during that period.

In response to these findings, TH has embraced the RCI's recommendations. The institution now declares profit distributions only based on audited financial statements, a practice implemented since 2022. This reform, along with governance and risk management improvements, has bolstered TH's financial performance. Profit distributions have seen a steady increase, reaching 3.50% for 2025, the highest in eight years. This reflects TH's commitment to managing the savings of over 9.8 million depositors prudently and transparently.