M'sia's Haj fund scandal has seen an ex-Minister charged with misappropriating over S$268 million in funds, what's going on?

Ever since July, something has been brewing in Malaysia regarding the management and operations of Lembaga Tabung Haji (TH), Malaysia’s Haj pilgrims fund board.

In 2018, the Malaysian taxpayer was required to rescue TH after it was discovered to have been misreporting its assets and liabilities, and paid out dividends despite its liabilities exceeding its assets.

The scandal has reignited after lying dormant for a number of years, with the release of the Royal Commission of Inquiry (RCI) report that was said to have been completed in July 2022.

The report’s release in July 2026 has led to several arrests, including one former government minister, and relates to the misuse of RM 860 million (S$269 million) in TH funds.

So what is Tabung Haji, what happened to its funds, and why is the incident resurfacing now?

What is Tabung Haji?

The Haj is a sacred pilgrimage, expected of observant Muslims and, to oversimplify, requires pilgrims to travel to Mecca in Saudi Arabia in the final month of the Islamic calendar at least once in their lives.

This is a journey that, again to oversimplify, takes considerable financial resources to accomplish.

Malaysia, being a majority Muslim country, has a large number of citizens seeking to make the pilgrimage from all strata of its wealth distribution.

In order to make the Haj accessible for as many Malaysians as possible, the predecessor to Lembaga Tabung Haji was established in 1963.

Malaysians going on Haj are required to open a savings account with TH, and one of the primary functions of TH is to administer and invest those funds using Islamic principles.

The size of the fund is considerable, the Malay Mail reports that as of 2024, TH had 9.55 million depositors with a total of RM91.747 billion (S$28.56 billion) worth of deposits.

So why is it the subject of scrutiny?

However, in 2018, it was revealed that TH’s liabilities were higher than its assets, and it had been illegally paying dividends in the four years prior to 2017.

Instead of the RM3.4 billion (S$1.12 billion) net profit it had reported for 2017, it was actually facing a RM1.4 billion (S$0.46 billion) net loss, due in part to "creative accounting practices" the RCI would later report.

The then Pakatan Harapan government led by Mahathir Mohamad announced that it would bear a RM 10.3 billion (S$3.4 billion) premium to save TH, and the fund would be restructured.

The RCI would later find that there were “irregular investment processes involving the manipulation of investment sustainability reports, creative accounting practices, misleading representations, and the concealment of information”, The Edge quoted Minister of Finance II Amir Hamza’s speech to parliament on Aug. 11.

These were among the causes of nearly RM13 billion (S$4 billion) in losses due to problematic investment decisions made before 2018.

It also determined that the government's 2018 intervention saved the fund, but at the cost of RM 10.2 billion, a price that was “ultimately borne by depositors, taxpayers, and all Malaysians.”

The Royal Commission of Inquiry

The Malay Mail reports that in 2020, the government of Muhyiddin Yassin decided that an RCI was needed, and by August 2022, the RCI's report was presented to Malaysia's king.

By then, Ismail Sabri Yaakob had become PM, and he called for fresh elections in October 2022, before the RCI’s report had been released to the public.

After the election, the Madani government of Anwar Ibrahim took over, but declined to release the report until July 2026, ostensibly as the government was concerned that the report might cause depositors to panic and withdraw their savings.

Ismail Sabri, whose party UMNO was in government at the time of the report’s completion and during the period of the TH’s mismanagement, for his part said UMNO had “nothing to hide”.

He said it was during UMNO’s time in government that the probe was initiated (UMNO was a junior partner in government during Muhyiddin’s premiership, and the senior partner when Ismail Sabri became PM).

This came as there was a robust back-and-forth between MPs in the Dewan Rakyat, Malaysia’s parliament, over why Anwar had chosen to sit on the report for nearly four years.

Who has been arrested?

But the RCI report has now been released, with Amir Hamzah saying that “action has been and continues to be taken against those responsible, including disciplinary action, police reports, court claims, and investigations by Enforcement agencies.”

Several former Tabung Haji board members have been arrested since the report's release, as well as one former minister.

Jamil Khir Baharom is a former minister at the Prime Minister's Department (religious affairs) between 2009 and 2018, under the premiership of Najib Razak, putting him in charge of TH at the most critical of times, as reported by Bloomberg.

Baharom has been charged with three counts of causing TH to dispose of more than RM860 million (S$ 269 million) in assets between 2015 and 2017, as reported by The Star.

He is also the second high-ranking UMNO leader to be charged over the affair, as Abdul Azeez Abdul Rahim was charged with one count of abuse of power on Sep. 9, as reported by MalaysiaKini.

Azeezb was the former TH chairperson, a former MP, and a current member of UMNO's supreme council.

Both men have pleaded not guilty.

Political ramifications

Bloomberg’s report on Baharom’s arrest noted the political dimension of the RCI’s report’s timing.

Malaysia’s politics over the TH scandal period was notoriously unstable, with the scandal being revealed by one PM, the RCI initiated by another, and delivered to a third, within the span of four years.

The past four years, by comparison, have been relatively stable, with Anwar’s Pakatan Harapan having reached a detente with UMNO in order to rule the country.

But in recent months, that unity has begun to break down, with UMNO sensing a return to power is on the cards, as PH’s coalition questions whether its alliance with UMNO has cost it its chance of significant political reforms.

As a result, the ties between the two factions, and their leaders Anwar and UMNO’s president Ahmad Zahid Hamidi, have frayed, with Zahid even going so far as to call for fresh elections as soon as possible, according to Bloomberg.

Anwar, for his part, has recommitted his party and government to its initial mission of reform and anti-corruption, which, given UMNO’s over 60 uninterrupted years in power, can be interpreted as targeting UMNO.

Protecting feelings

In fact, no less than Anwar’s former Keadilan lieutenant and Economy Minister Rafizi Ramli has accused Anwar of delaying the report’s release in order to “keep UMNO onside”, as reported by MalaysiaKini in July 2026.

Rafizi has previously intimated that he had known the contents of the report before, likely due to his previous position in the government.

In his view, releasing the report would have revealed how the institution of TH, and the crucial role it played in Malaysia, had been “marred” under UMNO’s administration.

Instead the report was buried as “Anwar was very careful to protect UMNO’s feelings”.