Sixty-six subsidiaries from five major federal agencies recorded a combined RM3.886 billion profit in 2024, according to the latest Auditor-General’s Report.
KUALA LUMPUR: An audit analysis of five federal agencies with the highest subsidiary investments revealed a combined profit of RM3.886 billion in 2024. The report, tabled in the Dewan Rakyat, covered subsidiaries under the Employees’ Provident Fund (EPF), Armed Forces Fund Board (LTAT), Federal Land Development Authority (FELDA), Pilgrims’ Fund Board (TH), and Retirement Fund (Incorporated) (KWAP).
EPF’s 35 subsidiaries led with profits totalling RM2.412 billion. This was followed by seven LTAT subsidiaries (RM570 million), six FELDA subsidiaries (RM376 million), nine TH subsidiaries (RM276 million), and nine KWAP subsidiaries (RM252 million).
Conversely, 42 other subsidiaries recorded losses totalling RM1.771 billion during the same period. These comprised 20 domestic and 22 overseas operations.
EPF also had the highest number of loss-making subsidiaries, with 21 recording a combined RM1.431 billion in losses. Other agencies with loss-making subsidiaries included FELDA (two subsidiaries, RM149 million), KWAP (10 subsidiaries, RM93 million), TH (six subsidiaries, RM83 million), and LTAT (three subsidiaries, RM15 million).
The report highlighted that 24 subsidiaries suffered losses for three consecutive years from 2022 to 2024. These 24 entities recorded a combined loss of RM466.57 million in 2024.
Reported losses accounted for impairment charges, write-downs, and interest payments to parent agencies in compliance with accounting standards. The chronically loss-making group included 12 EPF companies, six KWAP companies, three TH companies, two LTAT companies, and one FELDA company.
Overall, 58 federal agencies had 211 subsidiaries in 2024. Of these, 127 subsidiaries (63.2%) recorded profits totalling RM4.371 billion, while 74 (36.8%) recorded losses of RM1.819 billion. A further 10 subsidiaries were dormant.
To improve financial governance, the audit recommended a review of the direction and business plans for subsidiaries with three consecutive years of losses. It also recommended evaluating and considering the closure of subsidiaries dormant for over five years to prevent further burdens on agencies and redirect resources to more productive activities.