THE Armed Forces Fund Board’s (LTAT) declaration of a 2% dividend is not a matter to be politicised by Barisan Nasional politicians who had caused the problem in the first place, said Brigadier-General (rtd) Mohamed Arshad Raji.

National Patriots Association (Patriot) president said former prime minister Najib Razak and former defence minister Hishamuddin Hussein had some nerve mocking the new government for the poor performance of LTAT when in fact the problem was of their making.

Arshad said the auditor, Messrs Ernst & Young in its 2017-18 audit report on LTAT found “past transactions that contained potential irregularities and weaknesses in operational, accounting and legal areas”.

He noted that there were seven key findings on the financial irregularities and weaknesses in the report.

“Among the seven, two were serious and implicated negligence and incompetency of those previously at the helm, including the former prime minister and defence minister,” Arshad said.

“The first was the overpayment of dividend from financial year 2014 to FY2018 and this has affected the retained earning. The five-year asset returns were lower than the declared dividend rates, and had resulted in LTAT paying dividend at a higher rate than it should have.  

“The second was overstatement of LTAT’s assets between 2015 and 2017. This was due to failure to repair a large investment that went awry and has resulted in an overstatement of LTAT’s assets. Due diligence was not properly undertaken prior to investing in the company.”   

Najib had recently alleged that the “government is embarrassed to reveal the main reason behind LTAT’s 2% dividend”.

He had compared it to the previous payouts, saying “under the BN government, the dividend was 14.1% on average from 2009 to 2017”.

Hishammuddin, meanwhile, had criticised the PH government over the delay in the dividend announcement. He went further to say that “LTAT’s two largest assets, Boustead Holdings and Affin Bank, suffered the largest drop in their share prices after the 14th general election.

He also made the apparently erroneous claim that “Boustead had to sell off Hotel Bintang Royale Chulan to a Singapore company below market price”.  LTAT remains the owner of the hotel, to date

Rebutting Najib and Hishamuddin, Defence Minister Mohamad Sabu said it was better to pay a low dividend than to abuse the funds as was the practice of the previous government.

He said the dividend was in accord with the current financial standing of LTAT, which was now recovering from the financial irregularities and weak governance it suffered in the past.

“The government is not upset about 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.

Patriot, meanwhile, urged politicians on both sides of the divide to refrain from broaching the matter “until a thorough investigation is carried out and a final report concluded on the irregularities found by the appointed auditor.”

Arshad called Putrajaya to publish the probe findings so that depositors and investors may regain confidence in the fund.

“Should there be abuse or conflict of interest in the financial management by any member of the previous board, then appropriate charges be pressed against the offender(s).” – October 2, 2019.