Lembaga Tabung Haji (TH) said its 2018 restructuring exercise, including the transfer of underperforming assets worth RM9.7 billion, was necessary to prevent insolvency and has since restored the institution’s financial position, while addressing total investment losses of RM12.6 billion.
In a statement on Thursday, TH said the restructuring was implemented after the gap between its assets and liabilities widened to more than RM10 billion by the end of 2018, putting it at risk of breaching the Tabung Haji Act and preventing it from declaring profit distributions to depositors.
The institution said the government-owned special purpose vehicle, Urusharta Jamaah Sdn Bhd (UJSB), acquired the assets for RM19.9 billion under a bailout plan financed through two sukuk issuances, allowing TH to close the deficit and declare its 2018 profit distribution.
According to TH, the alternative would have risked a broader financial crisis if it had been forced to dispose of assets at distressed prices to meet large-scale depositor withdrawals.
TH also revealed that the overall recovery plan has now addressed RM12.6 billion in investment losses, comprising RM10 billion through the 2018 restructuring and a further RM2.6 billion in impaired assets that could not be transferred to UJSB and were resolved progressively until the end of 2025.
The institution said it retained a right of first refusal over assets transferred to UJSB but was under no obligation to repurchase them. It added that only assets meeting its investment criteria would be considered.
This year, TH repurchased land in the Tun Razak Exchange (TRX) for RM270 million, below the original sale price of RM400 million, and reacquired UJ Estates (Holdings) Sdn Bhd’s oil palm plantation for RM695 million, compared with its previous disposal price of RM800 million.
TH said these transactions demonstrated its commitment to acquiring assets only when they added value to its investment portfolio and protected depositors’ interests.
The institution also said financial reforms introduced since the restructuring have strengthened its governance and improved its long-term sustainability.
It noted that its annual profit distribution rate has risen from 1.25% in 2018 to 3.25% in 2024 and 3.50% in 2025, while reserves have begun to rebuild.
TH added that about 75% of the recommendations made by the Royal Commission of Inquiry (RCI) into the institution have been implemented since 2023, with efforts continuing to strengthen governance, protect depositors and maintain public confidence.
