KUALA LUMPUR (Feb 28): Member of Parliament for Tanah Merah Datuk Seri Ikmal Hisham Abdul Aziz on Wednesday suggested that Defence Minister Datuk Seri Mohamed Khaled Nordin shift his focus to the Armed Forces Fund Board (LTAT) instead of the companies owned by the armed forces pension fund.
During the debate on the royal address in the Dewan Rakyat on Wednesday, Ikmal, a former deputy defence minister, expressed support for the LTAT restructuring plan known as Sustainable 25, which primarily focuses on the diversification of its assets and increasing asset liquidity given its weak financial position.
Ikmal emphasised that LTAT's current overreliance on its flagship Boustead Group, with 50% of investments concentrated in the group, poses a heightened risk of significant losses due to the group's diminished value resulting from losses and debt.
"In fact, the structure of conglomerate companies such as Boustead is no longer suitable in the framework of government linked companies (GLCs) and government-linked investment companies (GLICs). Even Khazanah Nasional and Permodalan Nasional Berhad (PNB) have stopped investing in conglomerates," he said.
Ikmal suggested that the defence minister prioritise the future and stability of LTAT by giving it enough room to determine its own direction and execute its investment strategy.
LTAT had come under the spotlight recently after three senior officers resigned, beginning with chief executive officer Datuk Ahmad Nazim Abd Rahman on Jan 31, followed by chairman Tan Sri Raja Mohamed Affandi Raja Mohamed Noor on Feb 8.
On Feb 19, LTAT senior strategic director Dayana Rogayah Omar was also reported to have tendered her resignation.
The trio was involved in executing Sustainable 25, which was introduced under former defence minister Datuk Seri Mohamad Hasan and aimed at reorganising LTAT. The initiative commenced towards the end of 2021 as a multi-strategic initiative with the objective of changing the asset allocation portfolio of the fund.
Following a Cabinet reshuffle on Dec 12 last year, Khaled was appointed to lead the Ministry of Defence, taking over from Mohamad Hasan.
Shortly after, The Edge reported that those involved in the restructuring of LTAT were instructed not to proceed with any work, pending a review by Khaled.
On Tuesday, Khaled told Dewan Rakyat that he personally does not have any issues with the restructuring plan. However, specific proposals involving the restructuring of the business model and the management of shareholdings, including the sale of assets and disposal of shares in several strategic companies, need careful consideration.
"We are seeking a win-win situation, where the LTAT strategic plan will not adversely affect the companies, and the shareholdings of LTAT in its subsidiaries can be maintained at a level that allows LTAT to retain control," Khaled said.
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