KUALA LUMPUR: The Armed Forces Fund Board (LTAT) in its 2017 financial year should register profits of RM370.56mil and not RM662.17mil as reported, says its chief executive Nik Amlizan Mohamed.
According to her, this was due to unrecognised impairments and incomplete sales of two land lots in Cochrane and Bukit Jalil.
She said LTAT’s financial statement recorded RM202.71mil from the two land deals, despite the transactions not having been finalised in 2017.
“That resulted in the retained earnings by the end of 2017. Instead of what was announced (earnings of), RM259.99mil, it was actually accumulated losses of RM31.6mil,” she said.
Defence Minister Mohamad Sabu and his deputy Liew Chin Tong were present during her press conference in Parliament on Thursday (April 11).
Nik Amlizan said the unrecognised impairments consisted of the value of two share purchases by LTAT for Dayang Enterprise and Sapura Energy.
She said that the two stocks were worth RM18.46mil, compared to their purchase cost of RM107.36mil.
“Significant or prolonged decline in fair value below cost is consideration to determine impairment for the shares in these two (companies).
“As such, the impact from these findings as highlighted in the National Audit Report’s Qualified Opinion has caused LTAT’s profits for the 2017 financial year to be reduced from RM662.17mil to RM370.56mil.
“In addition, LTAT’s retained earnings would drop drastically to negative retained earnings of RM31.6mil from positive retained earnings of RM259.99mil previously.”
Nik Amlizan blamed the previous LTAT management for not introducing best practices, policies or guidelines.
She said that LTAT’s new management was currently restructuring to introduce clearer guidelines to avoid such mistakes in the future.
“The new management views this matter seriously, and for us, we have to ensure that this will not happen again,” she added.
The LTAT 2018 financial report will be released by July.