THE Armed Forces Fund Board (LTAT) and the Federal Land Development Authority (Felda) have been given two weeks to come up with an explanation about the losses that were highlighted in the 2022 Auditor-General’s (AG) Report.
Met by reporters after performing Friday’s prayers at Surau Amaniah in Putrajaya today (March 8), Prime Minister Datuk Seri Anwar Ibrahim said a notice for explanation has been handed to the two agencies to provide a full report.
He also said the relevant ministries and agencies will also be given a chance to explain.
“Although this is from the 2022 report, we want to make sure that we can improve on our weaknesses and take action where needed,” Anwar, who is also the Finance Minister, elaborated.
“They have been given a notice to submit a full report in two weeks, and the Cabinet will deliberate on it. What is important is that we need to stop the rot.”
Released on Wednesday, the report found that Felda recorded RM1 bil in losses in 2022, nearly double the RM545 mil in losses recorded the year before.
Felda also owed RM8.66 bil to external institutions as of 2022, a slight decrease from the RM8.8 bil owed the year before.
According to the AG, Felda had been “highly dependent” on financial assistance from the federal government, advising it to chart a clear direction towards operating without further financial assistance from Putrajaya.
The report also said LTAT has had a negative reserve balance since 2020 and unrealised losses of RM0.662 bil from 41 old share portfolios.
In separate news, LTAT in a statement today said its negative reserve refers to the other comprehensive income (OCI) reserve, which is just one facet of its combined reserve.
The agency said its combined reserve is composed of three components: retained earnings, reserve fund, and OCI reserve which, if combined, reflects its financial stability.
It said its reserve fund remains constant and is set at 2% of contributors’ account balance, providing a “foundation for its financial security”.
“Despite the OCI reserve showing a deficit, the combined reserve at the end of financial year 2022 amounts to a net positive balance of RM160 mil, representing an improvement from the preceding year,” it was reported as saying.
“This net positive reserve position leads to a book value solvency of above 100%, affirming that our net assets at book value surpasses the total contribution by our members.” – March 8, 2024
Main pic credit: Bernama
