The Royal Commission of Inquiry (RCI) into Lembaga Tabung Haji (TH) has recommended the establishment of a dedicated Haj Fund department within TH, with investment activities overseen by the Securities Commission Malaysia (SC) to strengthen governance and improve investment management.
In its report released on Wednesday, the RCI said the proposed Haj Fund should be created under the Tabung Haji Act 1995 and registered or licensed by the SC to manage and invest depositors’ funds while generating stable returns. The commission said this approach would allow TH to retain its investment management functions instead of transferring them to a separate subsidiary.
The RCI also recommended that TH’s investment functions be regulated by both the Finance Minister and the SC, while members of the Investment Panel overseeing the Haj Fund should be appointed by the Finance Minister. Senior officers, including the chief investment officer, would be appointed by the TH board but supervised by the SC.
Under the proposal, the TH board would not have the authority to direct investment decisions involving the Haj Fund. However, the department would be required to submit regular performance reports to the board, while the Audit Department and Audit Committee would have access to relevant financial information.
The commission said the new structure was necessary to improve professionalism as TH’s deposits currently stand at RM88 billion and are expected to reach RM100 billion within two years.
It also recommended building an experienced domestic and international investment team, with the international portfolio managed by external fund managers where appropriate.
The RCI further urged the government to strengthen TH’s business and investment model through professional management free from political interference to ensure the institution’s long-term sustainability.
