High dividends while Tabung Haji lost money are 'haram', says Mujahid

Former Minister in the Prime Minister's Department (Religious Affairs) Mujahid Yusof Rawa has described the payment of high dividends while Tabung Haji (TH) was making losses as a source of income that is haram for depositors to receive.

He said Muslims should not be happy over high dividend rates alone, but must also consider whether the money is halal or haram by ensuring the payouts follow the rules set out.

Mujahid criticised Umno figures and a section of the Malay community whom he said were pleased with the high hibah rates even though TH was in the red.

"Malays who say never mind, just give the (high) dividend, what's the problem. But what is their standard? If that is your desire, taking pleasure in money obtained through what is haram.

"What I mean by haram is breaking the law, you did not do the accounts properly. So as Muslims, where is our dignity in accepting a (high) dividend and being happy about it? But we know the dividend was not right and it was a deception," he said on the Kini Jelas audio podcast produced by KiniTV. (Quotes translated from Malay.)

The interview unpacked disclosures in the Royal Commission of Inquiry (RCI) report on TH, which was made public on July 29 after nearly three years.

The report revealed that TH's high profit distributions (hibah/dividends) between 2014 and 2017 involved "creative accounting" techniques, with payments made using depositors' own funds or capital rather than actual profits, in breach of the TH Act.

The RCI report also disclosed internal bonuses of between two and 13 months' salary paid to staff and management between 2010 and 2017, and recommended the recovery of RM2.19 million in bonuses from TH Properties directors.

In the 252-page report, the RCI said bonus payments by TH Properties in 2017 and 2018 breached provisions under the Companies Act 2016 as they did not obtain the required shareholder approval and resolutions.

Mujahid said that as Muslims and as an Islamic institution, they should respect the law.

"First, the law was not followed. Second, you deceived. You deceived by spinning all the profits, you set different threshold values, you changed (the threshold) three times to make your year-end accounts look good.

"And you did not record the losses. So this is a matter of breach of trust... it means you were not trustworthy in safeguarding Muslims' money," he added.