This article first appeared in The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025
In Corporate Malaysia, it is rare that CEOs resign when their plans to improve an entity are thwarted by a lack of political will.
It’s even rarer that the CEO makes the departure public and provides the real reason for leaving. After a change of the guard, what now for LTAT?
Datuk Ahmad Nazim Abd Rahman
Former CEO
When Ahmad Nazim left Lembaga Tabung Angkatan Tentera (LTAT) in January this year, many were stunned. His resignation took effect immediately, without any notice served.
He had left after the restructuring of LTAT was put on hold by the Ministry of Defence in mid-December 2023, a few days after a cabinet reshuffle that saw a change at the helm of the ministry, with Datuk Seri Mohamed Khaled Nordin taking over from Datuk Seri Mohamad Hasan as minister.
LTAT’s key unit Boustead Holdings Bhd, which is part of the larger Boustead group — that also comprises Affin Bank Bhd (KL:AFFIN), pharmaceutical company Pharmaniaga Bhd (KL:PHARMA), Boustead Plantations Bhd and Boustead Heavy Industries Corp Bhd (KL:BHIC), to name a few — was and still is heavily in debt and in dire need of resuscitation and a change in direction.
Ahmad Nazim’s letter of resignation, sighted by The Edge, showed he resigned as he was concerned that any further delay in the restructuring exercise could affect its execution and pose a significant risk to LTAT’s balance sheet. That, in turn, would impact the ability of the fund to meet its minimum dividend obligations.
“But if preserving the status quo is the goal, LTAT would have to continue to live with the legacy of opaqueness at Boustead group and the risk of having half our fund continuously exposed to a single entity with no clear oversight and ability to exercise control,” he said in the letter.
Ahmad Nazim’s plan was to privatise Boustead Plantations, partnering plantation giant Kuala Lumpur Kepong Bhd (KL:KLK), for RM1.15 billion. The deal would result in LTAT controlling a 35% stake in the privatised entity, with KLK controlling the rest and forking out billions for replanting and other expenses.
With the privatisation scuttled, LTAT was forced to undertake a RM1.11 billion privatisation exercise on its own to take full control of Boustead Plantations.
A week after Ahmad Nazim’s departure, LTAT chairman Tan Sri Raja Mohamed Affandi Raja Mohamed Noor resigned.
Tan Sri Azizan Ariffin
Chairman
Following the resignation of Tan Sri Raja Mohamed Affandi Raja Mohamed Noor, LTAT appointed former defence forces chief Tan Sri Azizan Ariffin as its chairman, effective April 1, 2024.
Azizan has said little since his appointment. But when announcing the appointment, LTAT said his extensive background in military affairs, diplomacy and leadership development would be instrumental in guiding the fund 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 the air force chief.
Tan Sri Raja Mohamed Affandi Raja Mohamed Noor
Former chairman
Raja Mohamed’s exit as chairman of LTAT was contentious as the LTAT had announced in a press release that he had retired.
In response, the former Chief of Defence Forces Raja Mohamed Affandi said in a letter to Ministry of Defence secretary-general Datuk Seri Isham Ishak: “I didn’t retire, I resigned. Being fired, retiring and resigning are different. So, when we resign, there’s definitely a distinction.”
When contacted by The Edge, Raja Mohamed said, “I did not retire, I resigned. Those are two different connotations.”
Raja Mohamed declined to comment on the reason for his resignation.
Defence Minister Datuk Seri Mohamed Khaled Nordin was quick to dismiss the resignation as “voluntary” and that “there is no issue regarding the matter”.
Mohammad Ashraf Md Radzi
CEO
Mohammad Ashraf assumed his role as CEO of LTAT on April 1, having served as its chief financial officer (CFO) since March 2020.
He was instrumental in many of LTAT’s policies and had worked alongside Datuk Ahmad Nazim Abd Rahman prior to the former CEO’s sudden departure. Mohammad Ashraf’s rapport with Defence Minister Datuk Seri Mohamed Khaled Nordin is said to be good, and he could be heading LTAT for the long term, spearheading the restructuring and transformation of the group which has more than RM11 billion in assets under management.
Truth be told, there are not many who would take on Mohammad Ashraf’s role, given what appears to be regular political interference, constant spotlight on the CEO and scrutiny over every deal.
Mohammad Ashraf, who is known as a determined, hard-working individual, was an accountant with Ernst & Young before leaving for UBS Investment Bank.
His experience in capital markets followed stints at Prokhas Sdn Bhd, an advisory firm wholly owned by the Ministry of Finance, and publicly traded construction outfit Ahmad Zaki Resources Bhd (KL:AZRB), where he was head of corporate finance and later, CFO.
Mohammad Ashraf has brought in his own team to help steer LTAT and its flagship, the Boustead group. In August, Haizad Rizal joined LTAT as CFO from pension fund Kumpulan Wang Persaraan (Diperbadankan) or KWAP. In October, Ahmad Farouk Mohamed took over as chief investment officer, having left Malaysian Industrial Development Finance Bhd.
Recently, LTAT sold 6.87% in Affin Bank to SG Assetfin Holdings Sdn Bhd, a unit of the Sarawak state government, following the state’s acquisition of a 20.08% stake from Boustead Holdings in November. The two blocks of shares in Affin Bank were sold for RM1.78 billion. The Sarawak government had acquired a 4.81% stake in Affin Bank from LTAT in April 2023 for RM221.74 million, or RM1.97 per share.
LTAT now has 22.01% interest in Affin Bank, the Sarawak government has 31.25%, while Boustead Holdings has exited the financial services group.
There is likely to be more happening at Affin Bank with cash-rich Sarawak holding the reins.
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