KUALA LUMPUR (March 29): The Armed Forces Fund Board (LTAT) has appointed the country’s former defence force chief General (Rtd) Tan Sri Azizan Ariffin as its new chairman, and Mohammad Ashraf Md Radzi as its new chief executive officer (CEO), effective April 1, 2024.

The new appointments fill the vacancies left after the abrupt departures of LTAT's former chairman Tan Sri Raja Mohamed Affandi Raja Mohamed Noor and CEO Datuk Ahmad Nazim Abd Rahman in early February and end January.

Their departures occurred just over a month after it was reported that a planned restructuring of LTAT had been put on hold following a change at the helm of the Ministry of Defence (Mindef).

Ahmad Nazim's resignation was announced by LTAT on Jan 31. A week later, the fund announced that Raja Mohamed Affandi had retired from the board with immediate effect after spending two and a half years as LTAT's chairman since his appointment in August 2021.

But Raja Mohamed told The Edge when contacted on Feb 9, “I did not retire, I resigned. Those are two different connotations.” He declined to comment on the reason behind his resignation.

Defence Minister Datuk Seri Mohamed Khaled Nordin, however, dismissed Raja Mohamed's resignation claim, saying he had "resigned voluntarily" and that "there is no issue regarding the matter".

In a statement on Friday, LTAT said its new chairman Azizan's extensive background in military affairs, diplomacy and leadership development will be instrumental in guiding LTAT towards its strategic objectives and enhancing its role in supporting the welfare of armed forces personnel and their families. Azizan served the Malaysian Armed Forces for 40 years and was also formerly the chief of air force.

Mohammad Ashraf, meanwhile, is assuming the role of CEO following his tenure as LTAT's chief financial officer since March 2020.

He trained as an accountant with Ernst & Young before completing his stint with UBS Investment Bank, LTAT said. He then developed his expertise in capital markets with Prokhas Sdn Bhd, an advisory firm wholly-owned by the Ministry of Finance. He then went to Ahmad Zaki Resources Bhd (AZRB), where he initially served as its head of corporate finance before rising to the position of chief financial officer.

The Edge Malaysia reported in its publication for the week of Dec 18-24, citing sources, that those involved in the restructuring of LTAT had been told not to proceed with any work on it, pending a review by Khaled.

Formerly the higher education minister, Khaled was appointed to lead Mindef during a Cabinet reshuffle that took place on Dec 12. He succeeded Datuk Seri Mohamad Hasan, who was appointed to head the Ministry of Foreign Affairs.

Khaled told the Dewan Rakyat in late February that the restructuring of LTAT, which involved plans to restructure the business model and shareholdings in several strategic companies, needed to be managed more carefully and meticulously.

He said he personally did not have any issues with the overarching strategic plan, Sustainable25, that was aimed at restructuring LTAT. 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, needed careful consideration, he said.

LTAT has reported a deficit in its reserves since 2020, according to the Auditor General's Report on Federal Agencies for 2022, released early this month. 

LTAT's reserves stood at a negative RM376 million in 2020, RM258 million in 2021 and RM338 million in 2022. Notably, 41 old stock portfolios with an unrealised loss of RM662 million as of Dec 31, 2022 contributed to the deficit.

But LTAT said it is still solvent, despite concerns raised by the AG over its long-running deficit in reserves. According to LTAT, the deficit highlighted by the AG refers to other comprehensive income reserves, only one of three components of its reserves, which track paper gains or losses. When combined with retained earnings and reserve funds, its total reserve position "reflects our financial stability", the fund stressed.

The Public Accounts Committee (PAC), meanwhile, has said it would be summoning Raja Mohamed Affandi, Ahmad Nazim and senior strategic director Dayana Rogayah Omar, who also recently resigned, to explain the fund's financial position.

Mindef said it is ready to provide an explanation to the PAC, should it be summoned, regarding LTAT's negative reserves.

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Khaled says he has no issue with LTAT restructuring plan, but sale of companies needs 'careful consideration'
Defence minister confirms Raja Affandi resigned as LTAT chairman, did not retire
Ex-LTAT chairman says he resigned, did not retire
LTAT chief executive resigns with immediate effect