THE Armed Forces Fund Board (LTAT) low dividend of 2% for the 2018 financial year is preferable to the abuse of funds under the previous government, Defence Minister Mohamad Sabu said.

Responding to criticism over the its dividend announced today, he said the 2% is in line with the fund’s financial standing at the moment, given the financial irregularities and weak governance that had plagued it previously.

“The government is not upset at having to announce a low dividend if it is in line with LTAT’s financial capabilities.

“This is important to protect the savings of contributors so that their money is not pawned as done by the previous administration,” Mohamad said in a statement today.

He said LTAT’s current management inherited an organisation that was riddled with non-compliance issues and weak governance.

“These were the result of leadership that was not transparent previously.

“In order to announce a higher dividend, it would have needed good returns from its investments. But the previous leadership made some dubious investments, which resulted in lower returns,” the minister said.

LTAT was warned by the National Audit Department over its 2017 financial year accounts, he said.

This was over an uncompleted sale of land which was recorded as income. After accounts were streamlined, LTAT’s nett revenue for 2017 declined more than 30% from RM686.8 million to RM459.5 million.

The same happened for financial year 2016, when its nett revenue also dropped 48% from RM685.5 million to RM356.2 million because proceeds from the sale of land that was incomplete were still counted as income.

“There is no use declaring high dividends if in the end, LTAT causes negative impact to its members’ financial welfare. This can be seen in recent years,” Mohamad said, while urging the new LTAT management to fulfil its mandate to care for veterans and protect their savings. – September 30, 2019.