KUALA LUMPUR (April 4): Defence Minister Datuk Seri Mohamed Khaled Nordin on Thursday assured that the ministry is committed to carry on the restructuring of the Armed Forces Fund Board (LTAT) under its Strategic Plan 2023-2025 (MAMPAN25).

The two-year strategic plan, the minister said, includes plans to restructure LTAT’s business model and shareholdings in strategic companies.

“I would like to reiterate the commitment of the Ministry of Defence in driving LTAT to become an organisation that contributes to the economic development of the country and guarantees the social protection of the Malaysian Armed Forces,” he said during his speech at the LTAT dividend announcement on Thursday.

“LTAT is committed to practising prudent and thorough cash flow management in order to fulfil the obligation to repay retirement savings to LTAT contributors.

“We only have one goal. We want to optimise the performance of LTAT with the best business model without giving up strategic interests in various entities that have great potential,” Mohamed Khaled added.

MAMPAN25 is a strategic roadmap following the conclusion of the previous Transformation Plan 2019-2023, as LTAT works towards realising its new vision of becoming "a sustainable provident fund" via various initiatives including the full adoption of sustainable investing standards, increasing liquid assets, and improving customer service index.

"Most importantly, this comprehensive plan also expresses LTAT's commitment to provide a sustainable dividend every year," Mohamed Khaled said.

During a Cabinet reshuffle that took place on Dec 12 last year, Mohamed Khaled, who was previously the higher education minister, was appointed to lead the Ministry of Defence, taking over from Datuk Seri Mohamad Hasan.

Shortly after that, The Edge Malaysia reported in its publication for the week of Dec 18-24, citing sources, that those involved in the restructuring of LTAT had been told not to proceed with any work on it pending a review by the new minister.

Merely three days after Mohamed Khaled was appointed to head the ministry, LTAT's then chief executive officer Datuk Ahmad Nazim Abd Rahman resigned with immediate effect. Then, its chairman Tan Sri Raja Mohamed Affandi Raja Mohamed Noor was announced to be retiring from the board with immediate effect, just a week after Ahmad Nazim departed.

Since then, the chief position has been replaced by Mohammad Ashraf Md Radzi, who was previously LTAT's chief financial officer since March 2020, while former defence force chief General (Rtd) Tan Sri Azizan Ariffin has taken over as chairman.

Affin Bank stake sale pending BNM’s approval

Meanwhile, Mohamed Khalid confirmed that Boustead Holdings Bhd, which has been taken private by LTAT in June 2023, will sell its stake in Affin Bank Bhd to the Sarawak state government, although he did not clarify the quantum of the stake that will be divested.

He said the deal is currently pending Bank Negara Malaysia’s (BNM) approval.

“We will proceed with that (stake sale). We are just waiting for the approval from BNM. Not LTAT, but LTAT's subsidiary Boustead. LTAT will still remain in Affin Bank,” he said, confirming that LTAT will retain its stake in Affin Bank.

LTAT currently holds a 28.79% equity stake in Affin Bank while its wholly owned unit Boustead Holdings has a 20.02% stake. The bank’s second-largest shareholder is Bank of East Asia Ltd, with a 23.93% stake.

Sarawak, via its investment arm State Financial Secretary Sarawak, currently has a 4.8% stake in Affin Bank, after it bought 112.56 million shares in mid-April last year at RM1.97 per share, or RM221.74 million in total.

In January, Sarawak Premier Tan Sri Abang Johari Openg said negotiations with LTAT for the state government to acquire an additional stake in Affin Bank was set to be finalised soon.