We’re working to fix it, Defence Minister says amid discrepancies in armed forces fund

Defence Minister Mohamad Sabu said that the government is working to correct the discrepancies in the Armed Forces Fund Board (LTAT), after the National Audit Department flagged the organisation for several dubious financial management. — Picture by Sayuti Zainudin
Defence Minister Mohamad Sabu said that the government is working to correct the discrepancies in the Armed Forces Fund Board (LTAT), after the National Audit Department flagged the organisation for several dubious financial management. — Picture by Sayuti Zainudin

KUALA LUMPUR, April 20 — Defence Minister Mohamad Sabu said that the government is working to correct the discrepancies in the Armed Forces Fund Board (LTAT), after the National Audit Department flagged the organisation for several dubious financial management.

In a recent interview, Mohamad expressed full confidence in the new chief executive of LTAT, Nik Amlizan Mohamed, who is tasked with restructuring the fund.

“LTAT has already been revamped and now the CEO is a new person, Nik Amlizan, whom I have confidence in her ability and professionalism.

“She was previously with the KWAP (Retirement Fund Incorporated), and she had made several revamps there,” he added.

Mohamad said that the Audit Department had criticised the ministry on its 2017 audit findings, in which it found LTAT to have actually suffered financial losses, but had declared to have made a profit instead.

“Our respond towards the criticism from the National Audit Department on the 2017 audit report tabled in 2018, whereby losses were declared as profits, is because of land sales which happened in 2017.

“Even before the sale was concluded, it was included in the 2017 account, and therefore declared as profit, when it was actually a loss amounting to over RM31 million,” Mohamad said, adding that the revised audit report would be submitted to the Audit Department soon.

The 2017 audit report was done during the Barisan Nasional (BN) administration.

Last week, Bernama cited a statement from Nik Amlizan, saying that the Audit Department found that LTAT failed to report the impairment for two “available for sale securities” amounting to RM88.90 million in its financial statements ended December 31, 2017 (FY17).

The report quoted Nik Amlizan saying that the fair value for the two shares as of FY17 amounted to RM18.46 million compared with the purchase cost of RM107.36 million.

She also reportedly said that the findings from the said department also showed that the fund’s revenue for FY17 included proceeds from a sale pertaining to property development amounting to RM202.71 million, which should not have been accounted for in the FY17 financial statements.

Nik Amlizan said these findings caused LTAT’s profit for FY17 to be reduced to RM370.56 million from RM662.17 million.