Kuala Lumpur, 4 August 2026: The Institute for Democracy and Economic Affairs (IDEAS) is concerned with the long-overdue release of the Royal Commission of Inquiry (RCI) report into Lembaga Tabung Haji (TH). The Government must now ensure that the report’s  findings are translated into meaningful institutional reform.

Given the gravity of the RCI’s findings, the report should have been released much earlier, not a few days before the Negeri Sembilan state election. The timing of the release meant that the report became a political campaign tool, when in fact, reforming TH’s governance should be a sustained commitment by the government, independent of partisan politics.

Of particular concern is the RCI’s finding of political interference in key decisions across TH. Politicians appointed to TH’s Board were not merely passive members but were involved in decisions that had serious consequences for the institution’s financial governance. For example, the RCI  concluded that TH should have recorded a RM1.4 billion loss in 2017 instead of the RM3.4 billion profit that was reported, while a RM2.75 billion hibah was declared despite concerns raised during the audit process. These findings demonstrate the risks that arise when political appointees are placed in positions of influence over decisions that should be guided by professional judgement, fiduciary responsibility and the long-term interests of depositors.

As the statutory body entrusted with managing the savings of millions of Malaysian Muslims, TH must ensure that decisions relating to financial reporting, investments and hibah distributions are guided by fiduciary responsibility, prudent financial management and the long-term interests of depositors, rather than political or short-term considerations.

The issues identified by the Commission are consistent with concerns that IDEAS has raised through its Pantau Kuasa initiative regarding the governance of federal statutory bodies. IDEAS’ report ‘Who Sits at the Table?’ found that 78% of chairperson positions across 135 federal statutory bodies have no clearly defined qualification criteria.

Broad discretion over appointments, coupled with limited transparency, weakens institutional independence and increases the risk that public bodies become vulnerable to political influence. The issues identified in the RCI should therefore be understood not as isolated failures but as symptoms of broader structural weaknesses in Malaysia’s governance framework.

“The Tabung Haji RCI reminds us that public confidence is built not only on financial performance but also on strong governance and accountable decision-making. The findings should therefore be used to strengthen the safeguards that protect statutory bodies from undue political influence. Through our Pantau Kuasa initiative, IDEAS has consistently advocated for reforms that promote merit-based appointments, institutional independence and stronger parliamentary oversight. The lessons from the RCI reinforce why these reforms are urgent and necessary”, said Aira Azhari, IDEAS CEO.

The Government has stated that approximately 75% of the RCI’s 25 recommendations have already been implemented. To strengthen public confidence, it should now publish the implementation status of each recommendation, identify those that remain outstanding and set out a clear timetable for completion. Transparency should extend not only to the publication of inquiry reports but also to the implementation of their recommendations.

IDEAS calls on the Government to:

1. Publish the implementation status of all 25 RCI recommendations, including timelines for the completion of outstanding measures.
2. Amend the Tabung Haji Act 1995 to strengthen governance, clarify accountability and oversight responsibilities and reduce the scope for undue political intervention.
3. Introduce transparent, merit-based appointment processes for statutory bodies, supported by clear qualification criteria, independent pre-screening of candidates and stronger board independence.
4. Strengthen parliamentary oversight of statutory bodies to reinforce accountability and institutional independence.
5. 5. Ensure that any evidence of wrongdoing identified by the RCI is investigated independently and in accordance with the laws, regardless of political affiliation.

The findings of the RCI must mark a turning point. Restoring public confidence in TH requires not only accountability for past failures, but a firm commitment to the highest standards of transparency, integrity, and good governance, free from political interference and partisan considerations.

Watch IDEAS’ documentary Who’s Who & So and So (2026), to better understand  political appointments in Malaysia’s GLCs and Federal Statutory Bodies.

Visit pantaukuasa.com to learn more about IDEAS’ Pantau Kuasa initiative.

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Download the Media Statement PDF File Here

For enquiries, please contact:
Ryan Panicker
Manager, Advocacy and Events
T: 03 – 2070 8881/8882 | E: ryannesh@ideas.org.my