Ahead of the Parliament debate of the RCI findings on Tabung Haji, former Economy Minister Rafizi Ramli drops a bombshell sounding the alarm over Lembaga Tabung Haji’s financial trajectory, alleging that the Federal Government has defaulted on fully settling its cash commitments under the 2018 turnaround scheme, leaving the pilgrims’ fund heavily reliant on paper assets and exposing it to structural liquidity risks.
In a detailed commentary referencing pages 107 to 137 of the Royal Commission of Inquiry (RCI) Report on Tabung Haji, Rafizi revealed that following the May 29, 2026 maturity of UJSB Sukuk Series 1 valued at RM12.5 billion, Putrajaya redeemed less than eight percent in tangible assets, rolling over the remaining RM11.5 billion into a new decade-long debt paper maturing in 2036.
Under the financial rescue framework enacted in late 2018, non-performing and underperforming assets belonging to Tabung Haji were transferred at above-market valuations to Urusharta Jamaah Sdn Bhd, a special-purpose vehicle wholly owned by the Ministry of Finance.
In exchange for taking over the impaired portfolio, Urusharta Jamaah issued non-cash debt papers, known as sukuk, back to Tabung Haji. This accounting maneuver restored the fund’s net asset position above liabilities on paper, allowing it to legally declare annual profit distributions to millions of depositors. However, as highlighted in the RCI findings, these paper assets yielded no immediate cash flow and depended entirely on the government’s capacity to redeem the sukuk upon maturity with cash or restored-value assets.
The RCI report underscores three critical observations regarding the turnaround structure. First, replacing troubled assets with non-cash sukuk was designed strictly as a temporary accounting fix to ensure Tabung Haji’s reserves returned to positive territory. Second, the federal government was expected to make explicit annual budget allocations to guarantee full redemption upon maturity dates in 2026 and 2029. Third, while accrued income from the sukuk visually enhanced the balance sheet, the fund’s long-term health hinges on real cash or liquid asset injections.
When Sukuk Series 1 matured on May 29, 2026, the government was expected to honor its obligation by transferring RM12.5 billion worth of cash or liquid assets into Tabung Haji’s portfolio. Instead, physical assets redeemed amounted to only RM965 million, comprising a parcel of land in Tun Razak Exchange and oil palm estates in Sarawak. The remaining RM11.5 billion was rolled over into a new ten-year sukuk paper set to mature in 2036.
Rafizi pointed out that successive federal administrations had systematically approved budgetary allocations to back Urusharta Jamaah’s sukuk redemptions. In April 2019 under Tun Dr Mahathir Mohamad, the government approved at least RM17.8 billion for this purpose, a commitment that was extended into the Twelfth Malaysia Plan under Dato’ Seri Ismail Sabri Yaakob and subsequently into the Thirteenth Malaysia Plan under Dato’ Seri Anwar Ibrahim.
Despite these multi-year budget provisions, actual cash payouts to Tabung Haji remain minimal. The RCI found that only RM500 million in total cash had been paid prior to its findings, while a separate RM1.5 billion allocation approved under Budget 2021 was withheld by the Perikatan Nasional government to fund COVID-19 recovery efforts.
Rafizi questioned where the multi-billion ringgit allocations provided over the years have gone, warning that repeatedly swapping old debt papers for new ones will leave Tabung Haji continuously exposed to severe cash flow and asset liquidity risks.
