TH scandal a ‘massive, diabolical Ponzi scheme’, says ex-ACCA chief

A royal commission of inquiry was established in 2021 to examine Lembaga Tabung Haji’s management, operations and asset-related issues from 2014 to 2020.PETALING JAYA: The financial practices uncovered at Lembaga Tabung Haji (TH) amount to a massive and diabolical Ponzi scheme, says former Association of Chartered Certified Accountants Malaysia advisory committee president Khalid Ahmad.Khalid said the matter was especially disturbing as TH was not an ordinary investment institution, but one with an "amanah" (responsibility) entrusted with the savings of millions of Muslims hoping to perform the haj.Khalid Ahmad.“It is diabolical in the sense that there was an intention to deceive, in other words, to scam. It was made to appear as though the institution was earning money.“The magnitude (of the scandal) is different because of the Islamic factor. The consequences extend beyond the institution and affect the psyche of Malays, Muslims and the rest of the world,” he told FMT.“This is something we have lost – not just our moral compass, but our 'iman' and Islamic compass.”Khalid said TH directors must understand the meaning of "amanah", warning that a breach of trust involving the savings of Muslims had wider repercussions for Islamic institutions.“Trust, when not executed, requires the greatest punishment."He said the board could not distance itself from the management’s financial decisions as directors were responsible for demanding proper disclosure and challenging both management and the auditors when the figures did not add up.Khalid said the losses should have been obvious once investments fell in value, particularly if assets, such as plantations, were acquired at prices far above comparable land nearby.He said the board should have acted when auditors sought to impair the assets to their realistic value.He also questioned what TH had achieved for Bumiputera economic development despite holding close to RM100 billion in deposits.“Where are the big Malay companies?

What is the point of having close to RM100 billion if the money is merely placed in other companies?“We should not focus only on the amount of money, but on the number of great minds and well-developed organisations.”The royal commission of inquiry was established in 2021 to examine TH’s management, operations and asset-related issues from 2014 to 2020. It completed its report in July 2022, befor…