"It is sad that money is used to bailout 1MDB," he added.
The former prime minister urged Tabung Haji to cancel the deal as it is over paying for the land to help pay for 1MDB's debts.
Tabung Haji has defended the purchase saying it was not a bailout, that it was forking out RM188.5mil for the parcel of land while its fair value was RM194mil.
Deputy chief executive officer Datuk Johan Abdullah said the decision to buy the land went through the fund's "usual and strict investment process."
On Tuesday, blog The Benchmark had released a set of documents purportedly detailing the purchase of two plots of land at TRX at an unreasonably high price from debt-ridden 1MDB.
The purchases, claimed the blog, were made of one plot of land for RM194mil at RM2,860 per sq ft, and for RM578mil at RM3,900 per sq ft for the second piece of land.
On another matter, Dr Mahathir refuted claims that his administration had misused public funds.
"The Malaysian Anti-Corruption Commission (MACC) advisory board chairman Tunku Abdul Aziz Tunku Ibrahim said that he is ready to investigate Jho Low and Riza Aziz if I lodge a report but in truth others have already made reports and no investigations were done.
"If he is so concerned about corruption, he should investigate and prove that I misused the people's money," Dr Mahathir said.
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