What specific financial issues did BNM flag in its 2014-2016 warnings to Tabung Haji?

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Bank Negara Malaysia Flagged Concerns Over Tabung Haji's Financial Stability Between 2014 and 2016

Bank Negara Malaysia (BNM) issued five warning letters to Tabung Haji (TH) between August 2014 and September 2016, highlighting concerns regarding the institution's financial position, reserve levels, and liquidity management. These warnings were not adequately addressed by TH, leading to a significant deterioration of its financial health, culminating in an asset-liability deficit of approximately RM10 billion by the end of 2018. The Royal Commission of Inquiry (RCI) later noted that TH should not have received a Clean Audit Certificate, suggesting that issues flagged as "Emphasis of Matter" should have been classified as non-compliance.
Concerns Over Financial Position and Reserves

BNM's warnings specifically pointed to issues with TH's overall financial standing and its ability to maintain adequate reserve levels. These concerns were raised as part of BNM's ongoing monitoring of non-bank financial institutions to ensure broader financial stability. Despite BNM's communications and reminders, TH's actions from 2014 onwards indicated a lack of serious attention to these critical financial indicators.
Liquidity Management Deficiencies

In addition to its general financial position and reserves, BNM also flagged deficiencies in Tabung Haji's liquidity management during the period of 2014 to 2016. Effective liquidity management is crucial for financial institutions to meet their short-term obligations. The continued deterioration of TH's financial position suggests that these liquidity concerns were not sufficiently mitigated by the institution's management.
Contravention of Tabung Haji Act

The lack of attention to BNM's warnings contributed to contraventions of the Tabung Haji Act 1995. Specifically, TH declared dividends when its liabilities exceeded its assets, which is contrary to Section 22 of the Act. Furthermore, TH continued the practice of distributing unprudent hibah (dividends/grants) that were not aligned with its actual financial condition up until 2017, exacerbating its financial difficulties.

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What specific financial issues did BNM flag in its 2014-2016 warnings to Tabung Haji?

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