Rafizi Lists Th S Dilemma Rm19 9b Debt Rising Haj Costs And 70 Year Wait

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Former economy minister Rafizi Ramli has outlined three interconnected challenges facing Islamic pilgrimage fund Tabung Haji (TH), which he said threaten the institution's long-term viability.
ADSIn a Facebook post today, Rafizi described the institution as vital to Malaysians, but warned it could no longer operate as it had in the past.
The Pandan MP highlighted that after being embroiled in poor investments and questionable financial practices, TH received a lifeline in 2019 when toxic assets were removed and absorbed by the public through a financial restructuring.
Rafizi noted that whilst deposit trends showed signs of recovery between 2020 and 2022, the 2023 figures revealed concerning patterns, with RM23 billion in withdrawals against RM22 billion in deposits.
"We do not yet have TH's audited financial statements for 2024," he said, adding that there were concerns if the trend of more withdrawals than deposits continued.
RM19.9b sukuk repayment
The first problem, according to Rafizi, centres on the RM19.9 billion injection from public funds when the government issued sukuk to purchase TH's loss-making investments.
"This capital injection must be repaid by TH when the time comes to settle the sukuk,” he explained.
He said it was highly likely TH would not be able to repay the entire amount, and any payment would impact its financial position, resulting in lower returns for depositors.
“Therefore, the returns for depositors cannot be as high as before, which has led to people being less inclined to save with TH,” Rafizi wrote.
Haj subsidies
The second challenge, he said, involves the significantly higher costs of managing the haj pilgrimage compared to 10-20 years ago, with TH unable to raise prices proportionately.
“TH, on the other hand, cannot raise the charges imposed to cover those costs, so there is an element of subsidy that constrains TH's profit margins,” Rafizi added.
ADSHe explained that higher annual subsidies to restrain haj cost from increasing resulted in lower recorded profits and lower hibah rates that could be declared, circling back to concerns about slowing savings rates.
The PKR lawmaker said that the third issue is the extended waiting time for haj due to limited country quotas.
“Those registering now may have to wait 50 to 70 years for their turn, leading some to feel they may never have the chance to perform the haj,” Rafizi added.
This lengthy wait, he said, will also affect depositors' savings rates.
Call for dialogue
Rafizi emphasised that these three interconnected problems would affect TH's position in the coming years.
"As an ordinary citizen, I hope the government leaders, the opposition, religious figures, and community leaders will also discuss this matter so that we can assess the solutions each side is proposing,” Rafizi urged.
In August, TH again defended its ongoing rebranding exercise aimed at retaining and attracting new contributors.
It warned of the impact on haj subsidies unless the trend of net fund outflows over the past three years is addressed.
Berita Harian quoted TH Group chairperson Abdul Rashid Hussain, who revealed that the institution recorded RM2 billion in net withdrawals during the period, a situation he described as a “silent haemorrhage”.
“This shows that withdrawals have exceeded the amount of new savings received,” he reportedly told editors during a recent briefing at the TH headquarters.
Of the total withdrawals, TH managing director and CEO Mustakim Mohamad reportedly said nearly RM1 billion was withdrawn this year.
Issues surrounding the rebranding exercise had sparked heated debates in the Dewan Rakyat, with Pengkalan Chepa MP Ahmad Marzuk Shaary accusing Minister in the Prime Minister’s Department (Religious Affairs) Na’im Mokhtar of failing to give a direct answer on whether TH granted the rebranding contract to a non-Malay-owned company without an open tender.
Minister in the Prime Minister’s Department (Religious Affairs) Na’im MokhtarNa’im had reiterated TH’s statement, which denied claims that it set aside some RM20 million to be spent on the rebranding, and that the exercise was valued at RM5.9 million.
However, Marzuk claimed a document he received allegedly showed the amount involved was RM18 million, and Dewan Rakyat deputy speaker Ramli Nor later warned that Marzuk risks being investigated under the Official Secrets Act (OSA) for citing a confidential document. - Mkini

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