KUALA LUMPUR, Feb 23 — The Auditor-General today gave Perbadanan Perwira Harta Malaysia (PPHM), the property-management arm of the Armed Forces Fund Board (LTAT), an unmodified opinion on its 2024 financial statements.

The report released today noted that PPHM’s liabilities of RM79.49 million exceeded its assets of RM57.54 million, raising concerns over its ability to meet obligations.

As of December 31, 2024, PPHM had net current liabilities of RM21.95 million, indicating limited capacity to cover short-term debts.

“Since 2020, PPHM has experienced declining profits, with revenue dependent entirely on ongoing projects scheduled for completion by the end of 2028.

“In 2023 and 2024, the Armed Forces Fund Board (LTAT) appointed professional advisers to conduct due diligence on PPHM’s financial position and recommend measures ahead of the planned cessation of operations in 2025,” the report said.

According to the due diligence report issued in January 2025, “PPHM’s financial position was not sustainable for continued operations.”

The Auditor-General recommended that PPHM take two key actions before closing “to settle outstanding creditors through negotiations and potential discounts, and monitor ongoing projects while implementing staff termination processes”.

Following these recommendations, a special board meeting in February 2025 resolved that “PPHM would cease operations on May 31, 2025.

Thereafter, LTAT’s Land Department assumed responsibility for managing any remaining obligations.

The board also instructed PPHM to develop a strategy to settle outstanding debts,” the report said.

By the closure date, 23 staff members had been terminated, at a total cost of RM2.32 million, including net compensation of RM2.26 million and RM60,000 in staff income tax.

The report also noted that PPHM’s liabilities in 2024 totalled RM79.49 million, comprising RM47.35 million in trade payables, RM31.79 million owed to LTAT, and RM35,000 in other creditors.

This represented a reduction of RM54.90 million compared with 2023, primarily due to the transfer of sale proceeds to LTAT.

Despite the reduction, PPHM recorded net current liabilities of RM21.95 million, showing that liabilities still exceeded assets.

For comparison, net current liabilities were RM25.93 million in 2023 and RM7.43 million in 2022.