This article first appeared in Forum, The Edge Malaysia Weekly on August 31, 2026 - September 6, 2026

The gross mismanagement of funds at Lembaga Tabung Haji (TH) has been well known since 2018. Yet, Prime Minister Datuk Seri Anwar Ibrahim is only now acting on the matter, when his political clout is on the wane.

While the importance of governance and the handling of funds at such entities cannot be overstated, if the truth be told, it’s a little too late to act against those responsible.

The reason is that time has run out for the current government, led by Anwar, to see through a judicial process for those answerable for mismanaging TH’s public funds.

Going by the series of past criminal cases involving politicians, the outcome will only be known in a few years. For instance, in the 1Malaysia Development Bhd trial where former prime minister Datuk Seri Najib Razak was sentenced to 15 years’ jail, the verdict was only delivered in December last year, some seven years after he was charged.

Generally, the judicial process favours the rich and politically connected. They hire the best lawyers who are well versed in legal technicalities. The tendency is to find loopholes during the trial to throw out the case or prolong it.

Most trials take about four years to end. Four years is a long time in politics. The dynamics at Putrajaya could change. And so can the slew of legal suits that politicians are now facing.

Last Thursday, former prime minister Datuk Seri Ismail Sabri Yaakob was charged in court with corruption. Ismail’s case first came to light in March last year when he was named as a suspect in the seizure by the Malaysian Anti-Corruption Commission (MACC) of cash and jewellery worth close to RM180 million.

The following day, former minister Datuk Seri M Saravanan was also charged in court with alleged corruption in approving foreign workers’ quotas involving RM1.1 million. Saravanan’s case goes back to 2023.

Last week, the MACC remanded former TH chairman, Datuk Seri Azeez Abdul Rahim, and former secretary general of the Treasury, Tan Sri Mohd Irwan Serigar, in relation to investigations into the pilgrims’ fund. The duo joined several other high-ranking ex-TH executives who were detained earlier.

The remand on Azeez, Mohd Irwan and the other TH executives only came after the release of the Royal Commission of Inquiry (RCI) report on TH three weeks ago. The report was completed four years ago.

In the current political mood, the Umno-led BN has found a new wind. After forming an alliance with Perikatan Nasional (PN), Umno is now eyeing a comeback to Putrajaya after the next general election.

Both BN and PN object to any prosecution involving TH and other politicians. They feel the delay in taking action shows that the move is more politically motivated than to curb corruption and the mismanagement of public funds.

Going by the current political swing towards a BN-PN alliance, the government at Putrajaya is likely to change after the next general election.

Should that happen, the cases and investigations related to TH and even Felda are likely to fizzle out. And if that happens, the Pakatan Harapan (PH) government has nobody but itself to blame.

The PH government should have acted on TH three years ago when Anwar was politically strong. In 2023, Umno was still finding its footing and the opposition PN was reeling due to divisiveness within its ranks.

The RCI report on TH was completed in August 2022, when Ismail Sabri was the prime minister. Releasing it now and going after those who allegedly mismanaged TH’s funds is a little too late in the day.

Filing charges against Ismail Sabri and Saravanan when the next general election is approaching suggests that the Anwar government is leveraging the judicial process to intimidate its opponents.

There is a myriad of causes that led to TH incurring a deficit in assets of close to RM11 billion. A complete breakdown in governance and a political figure heading a board that looked to appease the masses by declaring dividends beyond its means are among the factors that caused TH to require a government bailout.

The crunch came when TH’s management team caved in by being complicit in inflating the value of assets in its books and not providing for bad investments in a timely manner.

Just like any other fund, TH can only declare dividends when its assets exceed its liabilities, which are the deposits from TH members. When liabilities exceed assets and if the fund declares dividends, it is akin to using the deposits to reward the depositors.

TH’s management used the realisable asset value (RAV) method to inflate the value of the fund’s assets so that it could declare dividends. This was particularly telling in the financial years 2016 and 2017 when TH’s liabilities exceeded the assets it held.

And this was sanctioned by the auditor general of Malaysia. Former auditor general Tan Sri Madinah Mohamad even defended TH’s accounting methods in a forum organised by Umno last week.

Using the RAV accounting method, TH’s management itself determined the value of its assets, which was not verified by an independent third-party valuation.

The TH management used the RAV accounting method on its assets even when they had a market value to rely on.

An example is how the value of TH Plantations Bhd (KL:THPLANT) was booked in TH’s books. It was based on an RAV of about RM4.70 per share for the period ended Dec 31, 2017, when the market price was only RM1.16.

Since 2018, after PH 1.0 took over Putrajaya, TH’s books have been cleaned of all its overvalued assets and a cost of close to RM11 billion has been absorbed by the government.

TH’s returns have also come down to more manageable rates of between 3% and 3.5%.

Generally, the returns of shariah funds such as TH are low because they put their money in low-risk assets. No doubt the returns of private investments are high but so are the risks, which TH found out the hard way.

M Shanmugam ([email protected]) is a contributing editor at The Edge

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