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MALAYSIA'S Armed Forces Fund Board (LTAT) has been thrust into the spotlight yet again following the release of the recent Public Accounts Committee (PAC) report.
Little in the document will be new to even casual observers of LTAT’s travails: whether its financial challenges, like negative reserves reported since 2020 — including deficits of RM 376 million in 2020, RM 258 million in 2021, and RM3 38 million in 2022 — or its well-documented overreliance on its flagship Boustead Holdings.
Without making light of the disappointment the public, to say nothing of LTAT’s contributors, must feel — it’s all been said before and the PAC report merely puts on official record what has been known for some time.
However, for all the problems of the past, there are promising signs of recovery for LTAT under its current leadership. The focus now should be on depoliticising the issue and supporting the Fund’s turnaround efforts to ensure the welfare of the nation’s armed forces personnel.
The latest round of media attention risks pushing both the national leadership as well as LTAT’s, down unwise courses.
LTAT Must Not Fail
Some may call for LTAT to be allowed to go under, and for the government to stop throwing away good money. This is unviable.
LTAT is not just another company — it represents the financial security of Malaysia’s armed forces personnel and veterans. The stakes are too high for LTAT to falter.
Failure would lead to financial losses and undermine trust in an institution critical to national security. LTAT must remain solvent and strong, and it’s the collective responsibility of stakeholders to ensure this.
What About the Day After?
Another mistake would be to call for heads to roll indiscriminately without considering “the Day After” for LTAT and its companies.
Any wrongdoing must be brought to the book. However, excessive focus on the past risks overshadowing the present need for action. Scrutiny should go hand-in-hand with a forward-looking approach that safeguards the Fund and its contributors.
The new management team must be allowed to implement reforms without undue interference. Overfocus on what went wrong, to the exclusion of all else, hinders this.
And it is not as if LTAT’s current management has been sitting on their hands. LTAT declared a 5.0% dividend in 2022, up from 4.1% in 2021 and 3.5% in 2020. This steady growth is an encouraging sign of progress.
The PAC report outlines why the current Minister of Defence called a standstill on “Project Moonshot” to restructure Boustead and LTAT. This included ensuring alternatives were considered and avoiding a repeat of the fiasco surrounding the proposed BPlant stake sale.
One can disagree with these reasons, but there’s no guarantee that “Project Moonshot” was the only panacea for Boustead/LTAT. Everyone wants LTAT to succeed: it’s a question of strategy.
Less Politicisation, More Focus on the Future
What is happening is what many feared when the BPlant plan was torpedoed — that critics would have their way, but nothing would be done to resolve LTAT’s problems.
No one is calling for the matter to be swept under the rug. The PAC’s enquiries into LTAT, despite limited media coverage, show Malaysia’s checks-and-balances work.
Political point-scoring risks eroding public confidence and detracts from the urgent need to address the fund's financial situation. Depoliticising the conversation around LTAT would allow the new management the space needed to execute recovery plans effectively.
Scrutiny Is Important, but Let’s Get to Work
The PAC has rightly demanded accountability from LTAT. However, the current leadership must have sufficient autonomy to execute their strategies.
LTAT’s improved dividends are a testament to positive steps under professional management. Gains must be supported by collaboration, not hindered by political grandstanding or bureaucracy.
Accountability and transparency must not come at the cost of progress. LTAT’s turnaround is a matter of national importance. The public must support actionable solutions to protect the financial futures of those who serve Malaysia with honour.
Ismail Yaakub is a reader of The Vibes