During Najib years, MOF signed off on RM220m excessive Tabung Haji bonuses amid crisis

 

The royal commission of inquiry into Tabung Haji found that the pilgrims’ fund paid unjustified and exceptionally high bonuses of up to 13 months from 2014 to 2017 despite experiencing a financial crisis.

According to the RCI report, testimony from the Finance Ministry indicated that the excessive bonuses during this period would have required the finance minister’s approval.

The finance minister at the time was then-premier Najib Abdul Razak, while Husni Hanadzlah was second finance minister up until 2016 before being replaced by Johari Abdul Ghani.

The report showed that Tabung Haji had paid RM367.7 million in bonuses from 2010 to 2017, which it noted was "exceptionally high".

However, it said the bonuses from 2014 to 2017, which totalled RM220.7 million, were not only exceptionally high but also unjustified.

"The commission finds that, taking into account financial issues faced by Tabung Haji from 2014 to 2017 where the value of assets was lower than liabilities as reported in financial statements and affirmed by the National Audit Department, Tabung Haji shouldn't have paid high bonuses (during this period)," the report said.

These bonuses were paid to both executive and non-executive staff. The RCI did not provide a breakdown of how much bonuses were paid to executives.

It also doesn't state whether board members received bonuses, including Abdul Azeez Abdul Rahim, who was chairperson from 2013 to 2018.

Ex-Tabung Haji chairperson Abdul Azeez Abdul Rahim

According to Finance Ministry testimony, bonuses exceeding two months needed the finance minister's approval, taking into consideration Tabung Haji's financial performance, productivity liabilities, as well as testimony from the fund's board and the religious affairs minister who oversaw Tabung Haji.

Umno's Jamil Khir Baharom was the religious affairs minister from 2009 to 2018.

---

Creative accounting

In the case of the bonuses from 2014 to 2017, Tabung Haji justified them as the result of profits earned during that period.

However, the RCI noted that profits recorded during that period were due to "creative accounting", in which Tabung Haji's management adopted realisable asset value based on their own subjective estimates instead of audited figures to artificially inflate the organisation's financial position.

This was the same creative accounting used to justify high hibah (dividend) payments during this troubled period.

Ex-PM Najib Abdul Razak and (left) and former Treasury secretary-general Irwan Serigar Abdullah

The RCI did not specify whether it was Najib, Husni, or Johari who signed off on the bonuses. The trio were not interviewed by the commission.

Instead, the commission had interviewed former Treasury secretary-general Irwan Serigar Abdullah. - Mkini