KUALA LUMPUR — Parliament’s Public Accounts Committee (PAC) has taken the Defence Ministry (Mindef) to task for halting the restructuring of Boustead Holdings Bhd, a move that will affect the Armed Forces Fund Board (LTAT).
“LTAT needs to be transformed immediately, comprehensively and thoroughly…Mindef’s decision to stop the restructuring plan (of Boustead) which had begun under the previous LTAT management will hinder this,” PAC said in a statement today.
LTAT, which owns Boustead, is “too dependent” on the company’s income and performance, which has experienced various financial crises and suffered critical cash flow.
“This will increase impairment risks of up to 50% of LTAT’s fund value, which is almost RM5 billion.
“This depreciation will not only cause LTAT to be unable to pay dividends to contributors, but may also cause LTAT to lose the fund,” PAC said.
PAC noted that the decision to postpone and redraft Boustead’s restructuring plan was made by the company’s management, and did not include LTAT.
“LTAT as the owner of 100% of Boustead Holdings needs to be given full scope to formulate and implement a plan that meets the needs and objectives of LTAT, not the other way around,” the bi-partisan PAC added.
Boustead’s restructuring plan, launched in July last year, was a key part of the LTAT Strategic Plan 2023-2025 to reduce the fund’s dependence on the company’s earnings and to diversity its investments.
PAC said the restructurin is necessary to allow LTAT to directly own subsidiaries given the “various crises and scandals that have occurred under Boustead’s supervision”.
The parliamentary committee is giving Mindef and LTAT before the end of the year to present its follow-up actions taken to implement the fund’s strategic plan.
This includes LTAT’s share portfolio holdings as well as the fund’s direction, and Boustead’s restructuring process.
PAC began investigating LTAT following disclosure in the Auditor General’s Report in March of the fund’s negative reserves. – November 19, 2024