KUALA LUMPUR, Aug 11 (Bernama) -- The financial crisis of Lembaga Tabung Haji (TH) could have been avoided if the institution had taken appropriate action regarding warning letters concerning TH's financial position, reserve levels, and liquidity management issued by Bank Negara Malaysia (BNM) since 2014.
Minister in the Prime Department (Religious Affairs) Dr. Zulkifli Hasan said that based on records, BNM issued five warning letters to the TH Chairman and the responsible Minister between August 2014 and September 2016.
“Had those warnings been addressed appropriately since 2014, TH's financial problems likely could have been contained earlier, and the government's need to bail out TH could have been avoided.
“Instead, TH's financial position continued to deteriorate until its asset-liability deficit widened to approximately RM10 billion by the end of 2018, requiring a bailout from the government to prevent a larger financial crisis,” he said.
Zulkifli said this when winding up debate at the Special Meeting of the Dewan Rakyat regarding the Royal Commission of Inquiry (RCI) Report concerning TH in the Dewan Rakyat today.
Zulkifli said the matter is supported by the RCI's view that TH should not have been given a Clean Audit Certificate; instead, the matters stated as "Emphasis of Matter" should have been declared as non-compliance (a qualified opinion).
For information, BNM, in line with its functions relating to financial stability, continuously monitors developments within non-bank financial institutions, including TH.
“Based on the monitoring and discussions conducted, BNM was informed of the steps taken regarding the issues raised by BNM. However, in reality and as proven, TH's actions starting in 2014 did not show that BNM's warnings and reminders were given serious attention at all,” he said.
According to him, this also involved the declaration of dividends when assets were less than liabilities - contrary to Section 22 of the Tabung Haji Act - as well as the practice of distributing unprudent hibah (dividends/grants) not guided by the actual financial position, which continued until 2017.
In his winding-up speech, Zulkifli also gave an assurance that amendments to the Tabung Haji Act 1995 (Act 535) will be implemented immediately to complete the governance improvements already carried out.
In addition, he said Forensic Auditing has already been conducted on the investments listed in the RCI report.
“Meanwhile, the proposal to establish a Multi Agency Task Force to investigate each investment at risk of loss is welcomed and will be examined for implementation.
“Overall, the government's action is clear, which is to investigate, take enforcement action, recover assets, and strengthen laws and governance to ensure the trust and interests of TH depositors continue to be protected,” he said.
Meanwhile, Dewan Rakyat Speaker Tan Sri Johari Abdul expressed his appreciation to the Members of Parliament who participated in the debate on the RCI report regarding TH, which sat in the Dewan Rakyat for more than 10 hours today.
“Thank you, Yang Berhormat... The Dewan Rakyat has been sitting continuously since 10:00 am, seeing 39 Members of Parliament take part. We have also heard two ministers winding up, namely the Minister in the Prime Minister's Department (Religious Affairs) and the Second Minister of Finance.
“However, we do not stop here because we still have the Third Meeting taking place in October, and we can continue to ask questions if there are things we feel are unclear today,” he said.
Johari then adjourned the special meeting to a date to be fixed.
-- BERNAMA