Analysts Call For TH Reforms To Be Entrenched In Law, Strengthened By Oversight

Kuala lumpur: Reforms arising from the Royal Commission of Inquiry (RCI) report on Lembaga Tabung Haji (TH) must be entrenched in law and backed by robust oversight mechanisms to ensure governance reforms endure beyond changes in government, sociopolitical analyst Prof Datuk Dr Awang Azman Awang Pawi said. The Universiti Malaya analyst emphasized that although 75 per cent of the RCI's 25 recommendations had been implemented through a special task force, this alone did not guarantee that the reforms would be sustained in the long term. According to BERNAMA News Agency, Awang Azman stated that every recommendation should therefore be subject to transparent audit tracking, including clear implementation dates, responsible agencies, and Key Performance Indicators (KPIs), with annual progress reports presented to Parliament. "The key is to institutionalise the reforms, not personalise them. Critical matters such as a ban on active political appointments, professional eligibility criteria, the structure of the inv estment panel, accounting standards, and penalties must be entrenched in law, rather than merely through administrative circulars," he told Bernama. On checks and balances, Awang Azman, who is also a Senior Fellow at the National Institute of Public Administration (INTAN), said the RCI findings showed that the problems at TH went beyond several poor investment decisions, pointing instead to systemic weaknesses in its decision-making structure. He noted that the RCI had clearly linked the appointment of active politicians and conflicts of interest to the decline in TH's credibility, reinforcing the recommendation that such individuals be barred from serving as chairman or board members. He further explained that an institution managing public funds cannot rely solely on the integrity of a chairman or minister, as the system must be resilient enough to reject unreasonable decisions, even under pressure from those in power. On amendments to the Tabung Haji Act 1995 (Act 535), Awang Azman described them as an i mportant step, but stressed that legislative changes must be backed by strict enforcement. He proposed four safeguards to be established simultaneously: an independent and professional board, a legally constituted investment panel, a truly independent external regulator, and regular reporting to Parliament and the public. Awang Azman highlighted that transparency, accountability, and independence must work in tandem to ensure decisions involving TH were made in the interests of depositors. He warned that failure to fully implement the RCI reforms could trigger a crisis of confidence, given TH's role as a financial institution closely linked to the religious obligations of Muslims. Echoing the view, International Islamic University Malaysia (IIUM) political science lecturer Prof Dr Syaza Farhana Mohamad Shukri stated that institutional strengthening must protect TH from any form of political interference. She emphasized that the strength of an organization should not depend on the personality of whoever serv es as minister, but on a system capable of distinguishing between legitimate government oversight and interference in professional decisions. 'Amending the Act (Act 535) to limit certain powers and strengthen the board's independence is an important step, but legislation alone is not enough. It must be supported by a stronger and more transparent system. Governments and ministers will change. The true measure of the success of implementing the TH RCI is not simply how many recommendations have been implemented, but whether the changes can withstand a change in government,' she said. Syaza Farhana warned that failure to fully implement the reforms would have the greatest impact on public confidence in TH and public institutions in general. Meanwhile, Pertubuhan IKRAM Malaysia president Badlishah Sham Baharin stressed that transparent governance and oversight mechanisms free from political interference must be the top priority in restoring public trust in institutions managing national funds. He asserted tha t stronger governance, backed by strict oversight, adherence to Standard Operating Procedures (SOPs), and responsible accounting practices, was essential to prevent high-risk investment decisions and financial manipulation in the future. 'In improving the governance system of TH, you need to put people who have the qualities of merit, competence, integrity, and expertise. There must also be oversight mechanisms that can ensure procedures, laws, and limits of authority are being complied with,' he said. Citing the RCI findings, Badlishah advocated a robust governance framework must ensure that TH leadership takes immediate corrective action when regulatory bodies raise warning signs. He therefore supported strict limits on board directorships among top management to eliminate systemic conflicts of interest and backed the establishment of an independent regulatory body for non-bank financial institutions managing public funds.