Do Pro-UMNO Malays Realize They Will Be Bailing Out Tabung Haji To The Tune Of RM20 Billion For The Next 10 Years?

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Apr 09 2019
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In May 2015, Mahathir Mohamad warned Tabung Haji to cancel its land purchase from 1MDB (1Malaysia Development Berhad). He disagreed that the Malaysia’s Pilgrims’ Fund was being used to bail out 1MDB – purchasing a small 1.56 acre of Tun Razak Exchange land for RM188.5 million, when an area as huge as 70 acres was purchased by 1MDB for only RM194.1 million.


Tabung Haji was set up about 55 years ago to help Muslims in the country save up for the hajj, a pilgrimage to Mecca they are obligated to perform at least once. Over the decades, the fund board gained respect in the Islamic world for its management of the savings and Shariah-compliant investments, enabling over 30,000 Malaysian Muslims to perform Hajj every year.


Flushed with cash, the fund, however, caught a pair of glowing greedy eyes of Najib, who decided to secretly milk it. By December 2015, Zeti Akhtar Aziz, Governor of Bank Negara Malaysia (Central Bank of Malaysia) sent two letters to the chairman of the fund, Abdul Azeez Abdul Rahim and copied to the Prime Minister Najib Razak, who was also the Finance Minister.

1MDB Scandal - Najib Grill Central Bank Governor Zeti

The letter warned that the pilgrims’ fund was on the brink of collapse and a massive bail out by taxpayers may be required. Governor Zeti also warned that the fund’s obligations far exceed its assets, as she observed that Tabung Haji was paying out far more than it had made in profits in recent years, in the form of excessive “dividends” and “bonuses”.


It would take slightly more than two years later to discover the horror story of the Tabung Haji financial situation. All hell breaks loose after the stunning downfall of the Najib regime on May 2018. By December that very same year, it was found that the Pilgrims’ Fund was insolvent – a nicer and more polite word to say that the Malay Muslim institution was bankrupt.


Of course, the new government of Mahathir Mohamad has refrained from announcing the bankruptcy of the institution for fear of spooking the depositors. It would do more harm than good. After all, if 4-million Malays were gullible enough to vote for Najib’s regime, despite the exposure of 1MDB scandal, chances are they would not understand why Tabung Haji could go bust.

Tabung Haji Pilgrim Fund - Dividend 2017

It was ultimately revealed in December 2018 that UMNO, with endorsement from the PAS Islamist party to a certain extent, had transformed Tabung Haji into a Ponzi “get-rich-quick” scheme. As it turns out, there was a reason how the fund could distribute “hibah (dividends)” ranging from 6.25% up to 8.25% in the period between 2013 and 2017 under Najib administration.


At a time where fixed deposit rates were at about 3%, the unbelievable dividend returns were so attractive that a single depositor had invested more than RM190 million in the fund. A report prepared by government-appointed accounting firm PricewaterhouseCoopers (PwC) to review the financial position for 2017 unveiled more juicy stories.


Tabung Haji was actually sitting on up to RM10.2 billion in losses of its domestic and international equities as of October 2018. Its liabilities outstripped assets by RM9 billion. A report says – “The gap between the assets and liabilities is RM9 billion. If the RM9 billion hole is not covered, no ‘hibah (dividends)’ distribution is possible not just for 2018 but also in the coming years.”

Tabung Haji - Johan Abdullah, Abdul Azeez, Ismee Ismail

How did Najib government bankrupt Tabung Haji? It had lost RM5.7 billion in Felda alone. The pilgrim’s fund had been illegally distributing “hibah” to depositors since 2014, contravening the Tabung Haji Act 1995 where the fund is not allowed to declare dividends if its liabilities are more than assets. But the crooked dared not reveal the true financial health, as his mismanagement and incompetency will be exposed.


Ahead of the 14th general election on May 9th this year, the pilgrim’s fund even cooked its books to justify paying a 6.25% dividend, amounting to RM2.7 billion. The Pilgrims’ Fund Chairman, Abdul Azeez Abdul Rahim, had conspired with the board of directors to dip their hands into depositors’ savings to pay the dividends. And Najib knew all along about the Ponzi scheme.


Yes, the ignorant Tabung Haji depositors actually applauded Najib for the handsome “hibah”, which went up to as high as 8.25%, without realising that the dividends paid was their own money used to pay themselves. And UMNO could afford to scam them successfully because out of 9.3 million depositors, only 30,000 would use their money in Tabung Haji to perform Hajj every year.

Lembaga Tabung Haji - Serving Customer

Last Friday, Tabung Haji announced a “hibah (dividend)” of 1.25%, the lowest in the history, for the financial year 2018. Even at 1.25%, the payout was at a staggering RM913 million to its 9.3 million depositors. Mahathir government also announced that it will allocate RM500 million in 2020 for the Pilgrims’ Fund and RM1.73 billion every year until all of its “sukuk” (Shariah-compliant bonds) were redeemed.


How could Tabung Haji suddenly become as healthy as a horse overnight? Two words – Bail Out!! As of January 1, 2019, the Islamic Pilgrimage Fund Lembaga Tabung Haji was placed under Bank Negara (Central Bank). A Special Purpose Vehicle (SPV) was created to nurse and rehabilitate the insolvent fund. In short, taxpayers’ money to the tune of RM20 billion is used in the bail out exercise.


Even as Finance Minister Lim Guan Eng cracks his head squeezing every Ringgit to bail out the Tabung Haji, crooks from UMNO and PAS spread baseless and fake news that the hajj pilgrims fund board is now controlled by Chinese-based DAP. The depositors should be grateful that the fund is guaranteed by the government, unlike entity like Malaysia Airlines.

Tabung Haji Pilgrim Fund - Saving Books

That was why Amanah President and Defence Minister Mohamad Sabu was so furious that he said – “If Tabung Haji was not rescued, it would have gone bankrupt … those who stole from Tabung Haji were Malays, the ones who put it in dire straits were Malays. You (Barisan Nasional) stole, you practised corruption (and then) you accuse the Chinese (of wrongdoing) … How long do you want to play politics like that?,”


Mat Sabu, during his campaign in Rantau, said that to prevent the Pilgrims’ Fund from going bust, taxpayers’ money to the tune of RM1.73 billion will be injected – every year over the next 10 years – to rescue it. But if the 70% of Malays who had supported UMNO and PAS last May think the RM20 billion bail out has nothing to do with them, they better think again.


As many as 6-million ignorant Malays have been led by UMNO and PAS cybertroopers, propagandists and bloggers believing that 95% of income taxes are paid by ethnic Chinese, so it’s alright to let the “kafir” taxpayers take care of the bills. That’s only partially true. With the population of the minority ethnic shrinking, there’s only so much of the income tax they can contribute.

Najib and Rosmah Boarding Private Jet - Happy GST Everyone

Why do you think Najib Razak introduced the GST (goods and services tax) in the first place? The primary reason was because the Malays pay “zakat” as an alternative to income tax. The zakat paid will go to the Islamic cause while the tax the Chinese pay goes to paying the salaries of the 1.6 million civil servants, who happens to be mostly Malays. Najib needed a new source of incomes.


So, in order to “indirectly” tax the Malays, who did not pay income tax, Mr. Najib introduced the infamous GST effective from 1 April 2015, until it was abolished by the new government on June 1, 2018. In 2017 alone, the Najib government had collected an eye-popping RM44 billion from the Goods and Services Tax (GST). That was why all the Malays were bitching about the high cost of living after GST.


Unfortunately, whatever goes up will never come down in Malaysia. Hence, even after the GST was scrapped and replaced with SST, the price of goods has remained high. With the country trapped in RM1 trillion in foreign debts, thanks to Najib, from where does the ethnic Malay think the government could raise money to bail out Tabung Haji for the next 10 years?

1MDB - Tabung Haji Scandal

Tabung Haji depositors should consider themselves extremely lucky that not only their deposits are secured, but is also paid 1.24% dividends, when there should be zero percent “hibah” on top of a haircut on their deposits. The yearly RM1.73 billion cash needed to bail out the fund will come from the pocket of everyone, including the 4-million UMNO Malay supporters of Najib and his minions.


From existing taxes imposed on the KFC or McDonald’s meals that the Malays enjoyed very much to the newly introduced sugar tax to departure levy for travellers leaving from Malaysian airports, everyone will pay towards the bailing out of Tabung Haji. Those monies could otherwise be used for salary increment or bonus of civil servants, or reduction of toll rates, or other utility rates.


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Dear Sir,
Do our several other “Dividend Generating Machine” pay-outs derived from true earning?

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