# Tabung Haji RCI – You Can’t Handle the Truth (Episode 105)
Published: 2026-08-09T05:16:12+00:00

## Summary
Sam Saad and Syed Akbar Ali conduct a forensic examination of the newly released Royal Commission of Inquiry (RCI) report on Lembaga Tabung Haji, which covered the tumultuous period between 2014 and 2020. They argue that the government effectively bailed out the pilgrimage fund using taxpayers' money through an SPV, while masking systemic structural failures, creative accounting, and inappropriate political oversight under the Ministry of Religious Affairs. The discussion concludes with a radical proposal to strip Tabung Haji of its retail deposit-taking and fund management powers, leaving it purely as a logistics and travel operator.

## Key Takeaways
- [3:10] The RCI report on Tabung Haji was completed in 2022 but withheld from the public until 2026 under the questionable justification of preventing a bank run.
- [4:44] The government executed a disguised RM17.8 billion bailout by using SPV Urus Harta Jemaah to buy RM9.7 billion in bad assets at a massive premium of RM19.9 billion.
- [21:46] Frequent shifts in depreciation policies allowed Tabung Haji to report a creative RM3.48 billion net profit in 2017 despite actually suffering a net loss of RM1.48 billion.
- [27:00] Direct pilgrimage operations account for merely 1.4% of Tabung Haji's RM70 billion balance sheet, making its continued oversight by religious authorities economically illogical.
- [31:17] Tabung Haji should cease accepting deposits and managing investments, shifting savings to mutual funds while restricting its role strictly to hajj logistics and tour operations.
- [49:44] Tabung Haji paid out between 2 to 13 months of bonuses to staff between 2010 and 2017 despite underlying fiscal deterioration and illicit dividend distributions.

## Chapters
0:00 Accountability Deficits and Delayed Inquiries
2:19 Timeline of the Tabung Haji RCI
8:13 Debunking the 'Bank Run' Justification
16:43 Creative Accounting and Asset Overvaluation
24:52 The Pilgrimage Business Versus Fund Management
31:17 Divesting Deposit-Taking into Unit Trusts
37:19 Governance Flaws and Political Interference
48:58 Subsidiary Losses, Bonuses, and Police Reports

## Transcript
[0:00] Uh, RCI, I remember we had a Forex RCI as well. Right? Um, did anybody really Was there any accountability at the end of the day? Did anyone go to jail? Yeah. We had also an RCI. I don't know whether that was published. How How much was it? Uh, what I think it was, but You know, remember the RCI in Sabah on on the immigration issue? Yeah. Um, the illegal immigration issue, right? Was anybody held accountable? Right? Again, we we keep coming up to this. And here in this case, you know, it is 3 years too late.

[0:40] Yeah. If you ask me. Right? And I don't know whether I mean, the even the the recommendation itself it's going to be is going to be good enough. Because at the end of the day, investment funds and especially if you are investing into new new business that you want, you know, you need people who have truly gone through the ringer of not being political appointee, but actually real practitioner of businesses.

[1:11] I think the Tabung should not be in the business of taking deposits at all, period. Uh, we don't need that anymore, lah. But can I just So, how do you If If you don't know, I have to go there because why? You brought out a point. Ladies and gentlemen, welcome back to The Gadget Show podcast. I'm Shamsul Sam, and with me Said Akbar Ali. How are you, brother?

[1:30] Morning. Thank you. I'm fine. Right down. Uh, today I think uh, it's time that we unpack um, the recently released uh, to the public the Royal Commission of Inquiry on the uh, Tabung rescue and all the issues involved uh, concerning it. I've got my thoughts on it, and um, I think uh, I want to start off, Said. Uh, let's give an overview for our viewers because I think nobody is going to be talking the way we do on how we actually deep dive into this issue and where we see what the public should really know about this and how we should be looking at this matter. Sayid, can you please

[2:19] I mean let's kick it off brother. Okay, all right. Thank you. Yeah, last the the Royal Commission of Inquiry into the Tabung issue has been made public. Uh just to give some dates. Uh the the of course the Royal Commission of Inquiry was set up after uh you know, people after the Tabung became issue. Uh

[2:47] Yeah. Uh after it hit the press and things like that. Uh so the RCI uh was set up in July 2021. There was a cabinet decision. 2021 and the report was actually signed by the chairman in July 2022. So they took 1 year

[3:10] Okay. to finish the report. That's 4 years ago. Right. 4 years ago the chairman of the RCI signed the report and completed it and delivered it to the government. So 4 years ago is 2026 now and the RCI covered the period. This is quite relevant. The RCI covered the period from 2014 to 2020. 6 years. Uh because it is during this time that uh a lot of exciting things happened in Tabung yeah, which led them basically down the wrong path. Uh So bottom line uh it cost the taxpayers what, almost 18 billion ringgit because uh there was a restructuring of Tabung They had, well, basically money

[4:04] went out the window and never came back, in rather weird investments and bad investments, uh. So, uh uh they had built up a portfolio of bad assets. So, there was a restructure, you know, to re-jig the whole thing. And uh they like, you know, Danaharta during the financial crisis, they set up a special purpose vehicle on that model, and then they moved all the bad assets into the into the special purpose vehicle, and then special purpose vehicle raised the usual, really about issued bonds, raised funding. That's where the the government funding came in, the well, it's it's actually a

[4:44] bailout, uh. Mhm. Although the RCI let's let's let's call a spade a spade. It was a bailout of Tabung for about, what, 18 billion? 17.8. The assets that were transferred into the special purpose vehicle was over slightly over 19 billion, but they issued bonds for about uh 17.8 billion, uh. Of course, the the Royal Commission of Inquiry does not use the word bailout, but it as you say, like it is a bailout, uh. So, uh that is that is the the overall background of what happened. Uh I think we need to discuss a little bit of the details on on how things went wrong, you know.

[5:23] Yeah. So, it was a combination of uh poor management, uh mismanagement. Okay, here I think uh I don't want to uh well, if you want to question motives and intentions and things like that, then the government has to take it up, I don't think it's within my scope to question the motives, but certainly it was not properly managed which caused so much loss.

[5:52] Can I Can I interject at this short point because I think um what struck me first before we go down the the deep end uh on the on on the report itself. One of the my biggest problem is actually the report is 3 years at least at least 3 years too late in my opinion. Because why publish it now? Why was it not published 3 years ago or more than 3 years ago or almost 4 years as you pointed out right? When the RCI was uh was already presented and completed sign off. You know, it's almost like Can you imagine if you are a public company and your auditor sign off the report and then you don't

[6:43] publish your audit report? Uh what would Bursa do to you? No, can you imagine if I mean I agree. Imagine if you are a regulatory body body of something.

[6:55] Right. Let's take Bank Negara, all right? Correct. You are Bank Negara. You are responsible for the banking and financial system and then you discover that one of the banks in the country has has probably been doing some crap. So, you found out about it and you did a report things like that. And then you didn't release it.

[7:12] Correct. Huh? Yeah. Because uh you know, whatever whatever reason that you give uh huh? Well, they gave a reason. I mean, the Prime Minister himself gave a reason. Right? Which is the concern that it would be I mean, it's published in the newspaper that if it was published earlier that it may cause a run on the institution. And that would cause a a collapse. Now if I were to equate that to a public company, that means if I publish a report on an audit report and I don't want to publish it or I don't want to announce it public because it would make my shareholders sell off,

[8:01] I don't think that I don't think the regulatory bodies would would took much kindly to to what I would do. So, that's the only thing I would say because that was reported in the newspaper.

[8:13] Okay, there are there were there are a couple of points which I read from the Royal Commission of Inquiry report. So, I want to quote directly from from them. Uh huh. Uh okay, first of all, as I mentioned earlier, the The RCI was set up in on 14th July 2021. All right, we have to remember these dates. 2021, huh? They completed the report in July 2022, right? So, I mean, by right, July 2022, they should have made it public. Right? Uh in rather 4 years have gone by. So, okay, you mentioned certain certain reasons given or whatever. Doesn't matter. But, you see, yeah. Uh

[9:03] There was already a bailout of I mean, the restructuring of Tabung You know, that that that bond deal, the the government guaranteeing the bonds, 17.8 billion and all that. That happened that was approved and happened in April 2019. Much prior to the 2 years before the RCI was even set up. So, the moment the this restructuring, the rejigging of Tabung the bond issue and all that uh place, it was already stable. There was There's no danger of Tabung collapsing after that. I mean, you just restructured it. You just, you know, issued bonds. The government has guaranteed the bonds, and

[9:47] everything has been done. That That is a That is a the turnaround, the the, you know, saving Tabung So, there's no danger of Tabung collapsing the moment the restructuring was put in place on 5th April 2019. But, the RCI was set up in 2021.

[10:08] So, And the report came out 2022. 2022, and the reason given And and And it is now 2026. Correct. The reason given, and I quote the headline, Tabung RCI report withheld to prevent public money and to protect confidence.

[10:29] Okay, I my issue. That's my first issue. Yeah. Yeah, yeah, yeah. I mean, the public has a right to question Correct. But, I'm I'm merely stating the facts now from the RCI. In fact, I can even tell you it's on page 26, paragraph 29, where it says, I read it.

[10:47] Yeah, I read it, too. I mean, a portion of it, not the whole I say it is 250 pages. 200 and No, no, I read the I read a portion of it. Anyway, on page 26, paragraph 29, it says on 5th April 2019, Jemaah Menteri had already approved the bailout, I mean, the package of 17.8 billion. 2019.

[11:07] That means RCI was not even there at the time. Correct. That means the problem was already identified. Oh, yeah. And the amount, the quantum in order to stabilize a restructured entity

[11:22] Okay. was done in 2019. 2019. So, what's the issue? So, anyway, yeah. Anyway, there's something okay with mentioned bank run, huh? Right. Uh there was no bank run. There was no danger of Tabung collapsing. Certainly not after the the restructuring, the so-called bailout package was approved in 2019. But something else happened, huh?

[11:48] Mhm. Uh I'm referring to uh page 20 to 21 of the report. Right. Paragraph 22, lah, huh? Mhm. See, in uh okay, the relevant period, I remember what I said, the relevant period of the RCI, yeah? is 20 14 to 2020. 6 years of you know, this issue was dragging throughout these 6 years, huh? 2014 to 2020, yeah? That's the time period covered by the RCI. Okay? So, uh in 2019 Yeah, in 2019 from 2014 to 2020, yeah? So, what uh Tabung had been doing was they were declaring uh quite good

[12:33] dividends dividends, lah. Uh they were doing like hibah There was like yeah, 5%, 6%, which is quite Well, apparently it it Why was it high? I mean, compared to other returns and investments by other fund managers, maybe it's not nothing great, lah.

[12:48] Mhm. But it was considered high because um And there was a there was a letter issued by Bank Negara to them because they were dipping into their reserves to pay the dividends during that period. Which endangered their their future cash reserves, which was needed for other uses, which we which was uh uh I mean, for example, you know, Tabung they do cover some of the costs of the of the pilgrimage, yeah?

[13:23] Mhm. Uh the the costs about 33,000 ringgit. So, like B40s all do not pay the 33,000. They only pay like I think like a third of it if I'm not mistaken, and Tabung covers the rest. From these earnings from the reserves lah.

[13:41] Right. So, when they started paying up a high higher dividend rates profit sharing hibah, it ate into this the reserves that they had. There there thereby impacting or impinging upon the ability to maintain this program of helping the B40s and M40s, you know, uh pay for the full package, which is 33,000 ringgit now lah. Okay, so that was the situation. But, so they used to pay high high dividends, and uh it couldn't sustain. And uh it it was declining slightly lah from 5 to 4% things like that. But, in 2019, because you mentioned bank run. In 2019, the the dividends went down

[14:30] significantly, and it was uh 1.25% only. So, in 2019, it did cause some depositors to withdraw their money, you know. It was not a bank run, but uh yeah lah when your returns is only 1.25% some

[14:47] People move their money elsewhere. their money elsewhere is normal lah. But, it's no big deal because uh the deposits were at 73 billion. I'm referring to page 2021, paragraph 22 in case somebody wants to check up, huh. Uh the deposits were at 73 billion. Then after the dividend was 1.25%, some people withdrew, and it went down to 69 billion. That that's only 4 billion re- reduction in uh Tabung Haji's deposits lah. So, 4 billion out of 73 billion is not a bank run. It didn't collapse Tabung

[15:25] Mhm. You know what I'm saying? So, that was it. That was a bad news that impacted the public and and the depositors, which caused 4 billion to be pulled out in 2019. Now, again, let's remember the dates. The RCI was set up in 14th July 2021. So, so the the so-called pullout of four four Okay, that was the biggest chunk. That was the biggest chunk of change that was taken out by the depositors in 2019 when the dividend was 1.25% uh uh 4 billion reduction. That's item number one. And then after that, you have this uh what do you call this? The the restructuring uh The restructuring was

[16:11] also in uh 2019 uh April 2019, the Jemaah Menteri had approved the the restructuring uh the 17.8 billion and all that. So, so the the There was no real bank run, and the restructure already done in 2019. RCI only set up in 2021. Report done in 2022. So, interpret interpreted however you want you want it you want it. I'm just quoting the dates and the facts of what happened uh

[16:43] Okay. Now that we've covered the basic point in terms of the timeline, the overall coverage, I want to get to the layman understanding of uh this restructuring. Okay? I'm I'm very familiar with restructuring, ladies and gentlemen, and suicide. Okay? But, we want to bring it to uh the layman's uh uh understanding of this restructuring that overall we should really understand. Okay? Now, the asset that is transferred uh from uh Tabung to the Urus Harta Jemaah Sendirian Berhad that was set up by the government to take up this assets. The asset is valued actually at about 9.7 billion worth.

[17:29] Okay? However, to wipe out Tabung Haji's deficit, yeah, UJSB bought this asset at a premium, total premium price of 19.9 billion. So, we are look looking at approximately 10 billion in terms of the actual the the uh the valuation that is paid by the government on the 9 billion asset. All right? That's the bailout, guys. That's the amount to cover the hole. All right? So, say, let's go a bit into the detail.

[18:08] by the RCI, yeah. Yes. On on uh page 20 of the report, I'm going to be like an I cannot accountant to deal, yeah. Yes. On on uh page 20 of the report, I'm going to be like an accountant to deal, yeah. Okay, yeah.

[18:21] They uh they uh talk about uh where you where you it was in Malay, but in English it's basically creative accounting, yeah. It is mentioned by the RCI. itself uses the word creative accounting.

[18:35] Yeah. Yeah, it's in Malay, but uh this is creative accounting, and they zeroed in on uh this thing called realizable asset value Mhm. in valuing

[18:48] the the assets that they have. yeah. Uh so, uh I mean, an asset, an operating asset, uh has a value uh of today, Katakanlah today, yeah. Or or then you can the accountants or the valuers or whatever, they can also calculate the realizable asset value, like what it is worth or what it could be the Inshallah thing, lah. So, it is uh I mean it is not it may not be as prudent. I mean, realizable asset value has its purposes, why it's there. I remember when I was in in business school, we used to do valuation of companies in America, all these listed companies. And you know, the the

[19:36] time of acquisitions and mergers, basically they go to the sky by using realizable asset value, especially tech stocks. Somebody will say, "Oh, it's going to generate X% over the next 5 years." And this is the Inshallah situation lah. So, you use it for certain purpose. If you're selling the company, of course you'd like to do that lah, to to to demand a higher because you are the seller, you see. But when you are the buyer

[20:04] If you're the buyer and you go on realizable asset value, I I do not know lah. It may not be as as prudent lah. But also when you want to assess your own the the worth of your own assets, your own company. So, the RCI has has mentioned this that Tabung had been using this realizable asset value lah. And I think they the comments in the RCI was I mean, they indicated that this is one of the reasons they overvalued the assets lah, the companies that they bought lah. So, for example lah, because of this uh realizable asset value and higher valuation uh there was uh

[20:51] you know, this untung bersih net profit lah. So, they later they went after all these things, they they did, you know, the forensic accounting or they just went through the books and all that audit and all that. For example they they said that uh This is from page 18 to 19, paragraph 19 to 21. It's titled crisis keuangan. Uh Uh Again, the the the RCI said that in this period of time they kept changing the depreciation uh

[21:27] the depreciation depreciation policy policies. The depreciation and asset revaluation policies every year. Uh in this And in in 2017, uh Tabung changed the depreciation policy twice, you know? So, this is not a It's not a good sign.

[21:46] That's not a prudent way to I mean, you are a corporate guy, you'll know. So, so they said in 2017, they recorded untung bersih, net profit, of 3.48 billion. Right? When in actual fact, it was a kerugian bersih, net loss, of 1.48 billion.

[22:09] Mhm. So, from 3.4 billion positive the later when they when they check things in the account, they did a they they they hired an accountant to redo the audit the books.

[22:24] Right. They found that it's actually a loss of 1.48 a 1.1.4 billion. So, from 3.4 positive to to 1.4 negative, 3.4 + 1.4 is 4.8 billion worth of uh revaluations and you know, this how they compute your depreciation and all this changing the the depreciation policy and things like that. That's how you generated this differential uh of 4.8 billion from from positive 3.4 to negative 1.4. That's how much was the the re-computation la.

[23:06] the creative computation la. That's what happened. So, they flagged this thing as things that that took place, you know, over those years. There are many layers to this to this RCI report if you would I mean when we unpack it. You know, one thing that I want to say cuz I've been involved with institution

[23:31] funds and I would say at least in my career I I have I I I have known this Tabung know, professionals within the the the Tabung itself I said on the investment side this these people they're brilliant. I have to tell you this. Okay? I in terms of their capability in terms of how they are how good they are. Okay? Um That comes to the to the question in my mind actually. Was the management side in all these decision-making is where the concern are and also it was mentioned in the RCI. You know? Because if you if you deal with you know, the investment side the investment people you know, they

[24:32] these are not challenge challenge minds, you know. They You know what I mean? Yeah. I So, yeah, but I would also policy dividend policies. Okay? These are board decisions.

[24:52] There are there are there are other issues also in the entire set up of Tabung which the RCI has mentioned, Yes. uh which which are inbuilt weaknesses. For example, uh the RCI mentioned that uh on page 14 to 16, uh in that period of time, 214 to 2020, uh Tabung was put under the Menteri in charge of Agama Affairs, uh Hal Ehwal Agama, who is usually attached to the JPM, uh. Remember, this is 2014 2020, previous government, uh, long time ago, okay? So, uh Tabung by the very fact that it was pilgrims' affairs,

[25:50] Yeah. put under Menteri Agama, but you see, uh, uh Let me give you some arithmetic, uh. Tabung in this period, their deposits were 70 3 billion, went down to 69 billion, a huge, you know, 70 billion, uh. Banyak duit, uh. The the hajj business, the pilgrimage business, you know, there's a quota system, uh, which is which is determined by the Saudis, uh. Because

[26:18] There's only so many people they can afford. So, our quota is 31,600, Right. which is as at today, I think it was it's been there for a while, uh. You can keep it at 30,000, uh, senang kira, uh. Anyway, the quota is at 31,600, and today's prices, uh, it costs us 33,000 ringgit to send one pilgrim to for the pilgrimage to Mecca. So, 31,000 * 33,000, a billion ringgit, slightly over a billion ringgit. But the deposits and assets and investments, all these companies that we're talking about, they're worth about 70 billion ringgit. That's Tabung Haji's investment funds that they have. So, 1

[27:00] billion ringgit of that only is the the real pilgrimage business. That is uh I calculated this. It's about It's about 1.4%. The actual the pilgrimage

[27:13] actual uh the actual purpose of The original purpose of setting up Tabung from 1950s, I think, right now has become about only 1.4% of the total business and affairs of Tabung

[27:32] Yeah. Out of the 70 billion whatever funds that they manage, Uh the the pilgrimage is only about over a billion ringgit worth. So, about 1.4%. So, it is still under the Minister of Religious Affairs who basically is not qualified to handle 70 billion worth of assets, lah. Commercial assets, com- corporate investments. So, this is one of the weaknesses which is flagged by the Royal RCI.

[28:03] Uh it's on page 16 of the RCI. So, the RCI suggests that responsibility for Tabung be given to Minister of Agama Hal Ehwal Agama as well as Ministry of Finance. Ministry of Finance to take over all those financial issues and the Hal Ehwal Agama to focus only on the religious issues, lah. I think this is already being done now because after all these things happened, the restructuring and the bailout and all that, I think Bank Negara is now like more involved in the affairs of Tabung I mean, I'm just saying this from reading

[28:45] the RCI. from RCI and also what I read in the media. Uh Because it's not I don't know if it's if it's formal policy, but Bank Negara is, you know, like we're overseeing them a bit more on the financial side. Uh Uh of course, the on the religious side, the 1.4% uh maybe the Menteri Agama is is involved. But frankly, you know, I personally I don't see uh there's nothing very religious about Tabung Haji's functions. Because once you land in Saudi Arabia, you are under the Saudis. They set the they tell you what to do. You know, the the pilgrimage rituals and everything,

[29:28] it's all pretty standard. It's been there for 1,400 years. There's nothing for you to go and there's nothing new for you to do. I I find that really interesting cuz when you see like that, right? Uh Tabung sends, if I'm not mistaken, uh quite a number of their staff to uh so handle

[29:47] as tour as assistant. I call them like like for example tour guides. I I don't know what they do. Because when people, you know, go from Malaysia to there, they may not speak the Arabic language. They may not know the, you know, the the where to's and how to's of do performing all the rituals. So it's okay. They say they send these like who start people to guide them through. That's fine.

[30:08] an executive have to go? Yeah, that's that's fine. Yeah, that's fine. Yeah, it's So basically Tabung Haji's role is logistics. Yeah. You you have to get the pilgrims on the plane here, for which you need we need to sell tickets, you need to charter the airplane or any things like that. They land in Jeddah, you must have buses waiting, you must take them to the hotel. Then from there you need someone to organize them and take them to through all the walk them through all the rituals. So that it's logistics. It's like a trade thing. So of course they put it under the religious affairs

[30:40] minister from the old days. But I think now because of the role of Tabung you know, the funds are 60 70 billion ringgit, it's not It looks like that the pilgrimage thing is a tiny what?

[30:56] It's actually a non It's a It's It's It's not a core business. It's not a core business anymore. You know, financially it's only it's only worth about 1.4% of Tabung Haji's entire activities. You know, so we have to re-jig this. I have some ideas on on what what I think needs to be done lah. My conclusion, shall I just share it now?

[31:17] Please please please. No, my view is that the Tabung should not accept deposits anymore from the public. You know, you can you open your Tabung account. People do even for their children they open Tabung account to go for the pilgrimage lah. They start start start saving for years and years, huh? You know, it takes a long time for you to qualify to to get your slot to perform the hajj, you know, because so many people there's a waiting list. So, people do that. I feel that this function should be removed from Tabung Tabung should focus solely on the the logistics part, the tour operator.

[31:57] Putting people on the plane here in KL KL KLIA and and go to Saudi Arabia. So, they So, Tabung should not So, what So, becomes a pilgrimage company.

[32:09] That's it. A tour operator. That's it. So, what about these solid investment accounts where people can invest some money from the time they are 20 or year 21 years old or whatever, you know, for year years, huh? I suggest we move that function to the system we already have in this country, the unit trusts and the mutual funds. You know, you can go to some unit trust asset management companies. You can set up invest in a fund for your children's education, for example. Exactly the same.

[32:39] But actually, if you It's no big deal. It's just money. Correct. If if you ask me on the one point, I mean, if it's less than 2% of the value the value the value that they hold um Of their total business?

[32:52] total business, then it's it's a separate business altogether. And then the other business is actually is an is an investment fund. Yeah, so I think Tabung should should leave the investment fund portion and focus solely on the logistics and taking care of the pilgrims. That means their job starts the moment the pilgrims step on the airplane here. That's before that, they don't have a role. The problem These problems all have happened because that role became 1.4% and the money became big, 70 billion and all that, huh? So all these weird things happen, huh? Uh I think you leave that

[33:26] to just tell the people or, you know, tell the various mutual funds we have in the country. You need trust. Amanah Saham Amanah Saham Nasional Amanah Saham Berhad. You have Maybank Asset Management. You have Public Mutual Unit Trust and all that. There's so many in the country, yeah? Give them the leeway to set up a investment fund, and you can call it pilgrimage fund. So so the public now has option, huh? Because there's a reason why I'm saying this. The public now has an option. They can see Dulu I invest at Tabung I got 3% or 1.2% or 5 whatever. Suddenly suddenly, let's say

[34:07] another fund manager who sets up a similar thing. You invest with me for your for your for your pilgrimage, and they are consistently giving 6% or they can do 10%. Some of them Some of these funds can do quite well, huh? So the public has an option, huh? Why you want to tie to Tabung

[34:23] Let me let me just So so you move the point. May I give a counter point then because why? I think this is this is important. One of the things about the Tabung fund uh is that it's guaranteed by the government. That means that your your your uh what do you call uh your principal is not going to get uh is is not going to get uh what do you call reduced because of the uh performance of uh the fund itself. So, that is the other safe mode that things like ASN

[34:59] Yeah, there will be there will be some give and take lah. For example, Tabung now subsidizes some of the expenses for performing the pilgrimage. As I said, the cost is 33,000 per per pilgrim to go there and they have a scheme for like B40s and M40s they they subsidize they they give that assistance lah. So, that may not be available but looking at Tabung Haji's historical dividend rate even when they were supposedly paying high dividend it was like 6% and things like that. The commercial funds that are available some of them can do you know market lah they can do

[35:41] maybe better lah. But that there's there's no guarantee There's no guarantee And that's that's also the downside of it. The option lies with the public. They can they have a better choice lah. So, those of these unit trusts and mutual funds who want to attract these Tabung funds I mean pilgrimage in funds uh uh they will have to make it marketable lah. They have to make the people feel comfortable that if you put your money with me you'll get a better return, you know, things like that you see. What I'm saying is that market sorts it out.

[36:14] Well, okay. I I'm going to move a bit now. I think there's a not just a bit more. I think when you look at the detail of things one of the things that I find uh in terms of how government uh or government-linked investments, especially if you go into startups, or you go into acquisition of um assets and um uh company and and even into equity, again. Um The one prob- one one issue I realize is the depth of understanding of the business. Or the uh that the decision-making is is being made. Because why? There is one thing to be a brilliant accountant or brilliant

[37:06] in so-called investment manager. Okay? But when you make long-term investment, you need to really understand the business. Yeah, this is This is where one of the big weaknesses that I see.

[37:19] This is exactly the point because uh the RCI points out that this is the flaw, uh the RCI points out that this is written into the There's a act, uh you know, Tabung Act, uh uh section a number going on, uh 6.2 of the act, uh 535, which says, uh uh the qualifications, uh for to be a chairman, a board member of Tabung But uh pengurusi atau anggota lembaga hendaklah muslim dan warna warganegara Malaysia. That's it. No other No other criteria. Must be a Muslim and a citizen, uh. So, uh it says, uh tiada penjelasan tentang kriteria khusus yang perlu ada sebelum dilantik sebagai

[38:07] pengurusi atau anggota lembaga. So, this is basically the flaw in Tabung In the beginning, I suppose, when it was set up in 1950s, I don't know, really those Maybe relevant, uh. Cuz at that time, Tabung was not big money yet, uh. So, but now they have evolved. Now they have big money, billions of ringgit, huh? They have billions of ringgit. So, uh you need more than just being a Muslim and what are you going to get, huh? You need to be competent, huh?

[38:33] So, here goes. Here's Here's the point I'm making. I would I I'm making that it is just not that. That is already honestly almost laughable as far as qualification is concerned. It's not almost, it is laughable as far as qualification is concerned. The second part I would say is actually uh if you are just an investment manager, you look at numbers, you look at spreadsheets, right? And you don't have the You don't really have the business acumen of actually being an entrepreneur, understanding the underlying factors of actually operating a the business, understanding the business,

[39:17] and actually being able to comprehend, you know? That's when you make bad business bad investment decisions. then the double the double whammy's and the triple whammy's came in. So, the RCI says, "Lah, uh this is between 2014-2018. Uh

[39:42] So, the political This is what they said. And then and then So, then he said uh on paragraph paragraph 13, and this one I didn't write the page number. Paragraph 13 says, the double the double commission the double the double commission the double the double commission the double the double the double the double commission the double the double commission So, political input. This is what the RCI says, lah.

[40:14] got political input. Yeah. So, so I don't see any cure for this because this is this The problem is this is not the business of Tabung It doesn't matter even if you if you ban all politicians from holding position in Tabung You put only accountants and CPAs and whatever like doesn't matter. You still can't run away from all this because that's a nature The business is money. It's no more this logistics of sending pilgrims to Saudi Arabia to Mecca. It Now it's money. When you have money Okay, when you are operating a tour agency sending people for Hajj, what can

[40:50] go wrong? The toilets don't function in the plane. The food is wrong. Something like Okay, fine. Our hotel toilet Okay, fine. When you're handling 70 billion ringgit, something goes wrong, that is catastrophe. It's a wrong business for Tabung To me like it's It's It's a the This This completely wrong business.

[41:08] I understand where you're coming from. You got two core business actually. You You're not investment company. You're not an asset management company. You're not a unit trust and mutual fund. If you want to do that, you go and set up a unit trust and mutual fund, which we already have in the country.

[41:23] Let's assume that that that that you hive off the investment fund itself from the logistics operation of Hajj. Okay, Said, right? My point goes back to that. Actually, the why we keep happy happening Why this keep happening in terms of RCI Remember we had a Forex RCI as well, right? Did anybody really Was there any accountability at the end of the day?

[41:54] Did anyone go to jail? Yeah. We had also an RCI. I don't know whether that was published. How how much was it? What I think it was, but You know, remember the RCI in Sabah on on the immigration issue? Yeah. The illegal immigration issue, right? Was anybody held accountable? Right? Again, we we keep coming up to this. And here in this case, you know, it is 3 years too late.

[42:24] Yeah. If you ask me, right? And I don't know whether I mean the even the the recommendation itself it's going to be uh is going to be good enough. Because at the end of the day investment funds and especially if you are investing into newer business that you were you know, you need people who have truly gone through the ringer of not being political appointees, but actually real practitioner of businesses.

[42:55] I think that Tabung should not be in the business of taking deposits at all, period. Uh we don't need that anymore, lah. But can I just So how do you if if you don't know, I have to go there because why? You brought up a point. If they are not taking deposits anymore, how do they going to fund Let's say you hive off the investment side.

[43:13] are still selling the packages of going to the Hajj. Right. So they are still going to charge the people 33,000 ringgit, lah, per package. So they are still selling the packages. I mean, the 33,000 your your the people bottom 40 can't afford it.

[43:27] whatever investment account the people had with Tabung for 10, 15, 20 years or whatever, they would they would move that into the existing unit trusts and asset management companies that we have in in the country already. Take ASB, lah. ASB can set up their Tabung accounts. So instead of going to Tabung you go to ASB. So you save your money there cuz cuz ASB is an asset management company. They are they are the experts.

[43:50] you bring the returns back to the Yeah, lah. Tabung just sells a ticket. That's it. So they handle every two operator. So they still make the 33,000 from there. They have to cover their cost, which is what you're asking, lah. How they cover their expenses? Yeah, that's it. It's more than enough. So I think Tabung should get out of the money business. No more taking deposits. You don't need that at all. Move it to the the unit trusts and the mutual funds. ASB, ASN, the others are so many in the country. It's sufficient. Tweet the system a little bit. Bank Negara has to

[44:21] write some new regulations. Get it done. You know? But I want to say a couple of things that the RCI has recommended which I don't agree with. Now, first thing they said the responsibility for Tabung should be put under two ministers, MOF, Ministry of Finance and the Ministry of Agama. Uh from what we've been discussing so far, I think it should be put only under the Ministry of Finance because it is all it's it's a financial game now. As long as they're still in this business, because the really the pilgrimage portion is tiny and there's really not not much religious issues for us in

[44:55] Malaysia for our authorities to handle because everything is set by the Saudi Arabian government. The moment our our pilgrims land in Jeddah in Saudi Arabia, you are under the authority of the Saudis. They they have organized everything, you see? Where to go, when. Everything's already. We just follow. So there's really not much of religious inputs, so to speak. There's not much religious input required on our side. Uh it has become a financial company, financial, you know, they they manage billions of ringgit worth of assets. So it's best that they put under

[45:32] Ministry of Finance. The other thing which they have said, the RCI has said is that you see, uh they identify that they say one of the weaknesses is that in the present setup the minister uh Minister of Agama, Hal Ehwal Agama, he can fire anybody in in the Lembaga Tabung without having to give any reason. He can just ask them. And it has happened. Uh uh uh a CEO was removed. The CEO was basically fired in 2021 and then a chairman also was fired in 2021. Okay, I don't know why they mentioned this because this 2021 whereas the purview of the RCI is only up to 2020. Yeah.

[46:20] But these two guys were fired in 2021. Okay, fine. It's a small issue. But they say that uh they do not want the minister to have such powers to fire anybody you could sukati or you know without having to explain. They would rather that before you fire anybody from the Lembaga that there must be a jawatankuasa and some kind of a procedure before they are fired. I disagree because most of the problems are caused by these uh the Napoleons

[46:52] people at the operating level. The minister you know a minister is a minister he's in Putrajaya. He's got so many things to do. It's the guys who are running the business who basically I think messed up. Now if you tell them that you cannot be easily fired you need nobody can remove you uh you know just by issuing a a notice that you know it you have to go through a procedure jawatankuasa and all that before somebody is removed from the office. I think the Napoleons will be very happy. And then they don't answer in Parliament. And the minister answers in Parliament.

[47:31] I I I agree with you in that sense that So so I think I believe like Donald Trump you know you give them authority you're fired. If you mess up you're fired. That's it. I mean it should run like a private sector. Private sector. Yeah. The the The most important thing is who is the minister. So if you put Tabung under the minister of Hal Ehwal Agama you're not going to it's not going to help you much because he's a agama minister he does It's know much about all this money finance and you know, business and things like that. This is the problem. So, move it to a

[48:01] minister under Minister of Finance, and he is more, you know, he's equipped with the necessary skills and experience to handle these things. So, I totally disagree that you know, you should you should not make it so easy to remove a member of the Lembaga. I think it's the other way around.

[48:21] You give them notice at 9:00 or 10:00, you get out. I prefer that. Because these are the people who cause the problems. You see? So, now you're suggesting that no, they should you cannot fire them as easily. I think that's wrong. I I totally disagree with the RCI on that.

[48:36] I I think it should I agree with you on that because I think it should go like the way we handle things in the private sector. Anyway, it's as you said, it's a money business. It's not it's investment. 70 billion. Wow. I I'm wondering even now actually is the government going to get back whatever that it has issued out on the sukuk.

[48:58] Okay, can we talk on can we talk about what's going to happen now? Yes, please. What you just said lah. Because one of the recommendations made by the RCI is that Yeah. Page 30, para I. Here they mention one of the subsidiaries. Bonus telah diberi Okay, paying huge bonuses was an issue. So, on page 137, I'm back to my pages. 137 para 3.12.7. It says that between 2010 and 2017 uh

[49:44] they paid bonuses of between 2 months to 13 months to their staffs. Uh Huh? in 2010, for example, the total bonuses paid la was 25 million ringgit. Right? By 2017, uh it became 56.7 million ringgit.

[50:05] Wow. So, a lot of money was paid out in bonuses la. But, the RCI says suggest that uh usaha untuk dapat semula bonus yang telah diberi, this one I think is going to be a bit uh difficult. But, nevertheless, they did make this point la. Uh that uh overpaid bonuses and somebody should do something about getting it back. I think in in uh for all practical purposes, it's not going to happen. But, uh nevertheless, this is the uh point that they made la.

[50:36] You um I think that's bonus on the uh on the executives. Right? Uh yeah. And and board members, probably. I'm not so sure. I think you uh bonus is one issue. But, I do think the other part is that the RCI uh mentioned that Tabung uh distribution of dividends the hibah la. Right? Between 2014 to depositors between 2014 and 2017 um are effectively in violation uh of financial rules, you know, as outlined by the Tabung Act in Tabung Act 1995. That's another big point.

[51:21] Mhm. I mean, the you when you are actually making losses and uh you're issuing dividend, you can't do that. Mhm. Yeah, that's right. Okay, I got a couple of another couple of points that I think I want to wrap up my my my points la. What you just said about Uh yeah, the other thing was the the RCI has listed la a bunch of uh poor investments poor investments. So, I read some of them and I see a pattern. I see a pattern, huh? Um on page 30, paragraph J, yeah? They have listed uh this com- basically companies, huh? Which uh uh Tabung invested and lost money,

[52:06] huh? So, in para- in paragraph K, they say they he- they said pihak kuasa wajib ambil tindakan tegas. Okay, uh what happened was in some of these investments, huh? For example, uh Tabung would would identify a company or there is a company that they invested in. They take a stake. Uh you know, what? 10%, 20%, whatever. They'll take a stake in the company. And uh the the hope is that this company will go for listing. That I mean, that was how they were convinced into taking the stake, huh? The company is going to go for listing. So, they go in at uh what would that mezzanine level or whatever?

[52:46] I mean, termi- terminology, huh? They go in at a basic level, huh? So, and then uh hoping that when the company goes for listing, they will the share price will go up multiples, huh? They will cash out, huh? But, they also had a put option on this uh the people these companies, huh? On the vendors of the shares, huh? The put option was that if your listing does not happen, you return my money to me, huh? Whatever that you paid for, I'll get back. So, it is it is uh there are a few examples quoted in the RCI. I've got names of companies here where I don't want to read, huh? Anybody want to go

[53:22] and read RCI, huh? So, uh the listings did not happen. Some of these companies They uh yeah, there was one company Tabung invested about 20 million. 20 million, huh? Uh and then they supposed to go for listing. The listing didn't happen. So, Tabung exercised their put, huh? Give give my 20 million. They only paid back about 2 million. The rest of the money uh don't know where it went lah. So, this happened a few times. So, that's how they got basically taken to the cleaners lah. So, these are among the things. So, it is now it is up to the So, so what's going to happen next, huh? Uh because uh

[53:59] another recommendation or point that they made was that uh the RCI says that I read somewhere here. The RCI mentions lah that uh that they're asking the authorities the government basically to take action. So, the RCI mentions that police reports have been made, right? Police reports and the various police reports have been made over these Tabung cases. And then they indicate that uh wrongdoing lah salah laku has happened lah. So, police reports and salah laku indicates uh criminal criminal intent lah. So, the RCI recommends that further action be taken. That's a point That's a point that

[54:47] you know we should raise lah. What's going to happen next? The RCI has done their job, huh? I think all said and done, we have to uh appreciate what they have done lah, the Royal Commission of Inquiry. Uh they've done quite a detailed job lah, you know. So, they are saying now, you know, you have salah laku, police reports have been made, please take further action. They have recommended even to take the bonuses. That won't be difficult, huh? But the other things is like what's going to happen now? So, 3 years what 3 years have gone by?

[55:20] Full full uh full disclosure. So, so now, okay, we cannot change the past lah as I keep repeating. This is between 2014 and 2020, right? So, this is 2026. It's okay, fine. It's our money. It's taxpayers' money. The government has to The government gave a guarantee, you know, for that the bond issue 17.8 billion, huh? What is going to happen next?

[55:43] You mentioned earlier the other cases. You ask, you know, Nothing happened. Nothing happened, huh? Yeah. Uh what about this case? What's going to happen What the What is relevant for you and me today is what's going to happen next. The RCI has already made it plain, huh? Police reports have been made. Uh there's indication of salah laku. Uh To me, 2 + 2 is quite straightforward, lah, huh? So, what's going to happen next? Are we going to wait another 3 years and then say that, "Oh, you know, you didn't take" or whatever excuse, lah, or another 4 years? What's going to happen

[56:18] next? That's my question. Well, full full full disclosure, I mean uh uh uh Or rather Or rather if if I ask you a question, what do you think will happen next?

[56:30] No, I don't think so. That's it, lah. Because sometimes I mean, unless you've been asked, because we are you you're you're in the banking side of it, I'm in the business side of it. Full disclosure, I do know uh you know, I I can identify uh some of the names, right? And full disclosure, I probably have answers to that. But the the thing is, I don't think as long as we got political interference in appointments and decision-making investments, um I don't think um uh it can and and you got little Napoleons that can actually make these decisions without consequence.

[57:16] I don't think this is the the the last one we'll we'll see. So, I have a very pessimistic uh very pessimistic point of view. Because you see the system of political patronage that we have in the country, you know.

[57:32] We we talking about that non-stop. If if you're a politician and you you have responsibility or authority over an organization like Tabung with 70 billion ringgit in assets, do you want to give it up?

[57:49] So, on that note, okay ladies and gentlemen, we hope that actually we have unpacked we try to unpack it as much from a layman's standpoint so that you can see uh in this conversation where our concerns are uh and how it actually impacts because those money that used for bailout are our money. Uh say

[58:12] Yes. Yeah. So, I mean the if you ask yourself why our salaries are not going up um why our uh GDP per capita does not go up, these are one of the reasons for it. Okay?

[58:27] My my closing point is exactly that line. It took uh 4 years for this report to be made public. Uh I want to see how many more years it takes before those recommendations in the report are put into effect or some action is taken.

[58:45] Well, on that note, thank you so much. Uh like and subscribe. We'll see you again in the next episode. Thank you. Thank you very much.