PETALING JAYA: Armed Forces Fund Board (LTAT) chairman Raja Affandi Raja Noor tendered his resignation following a disagreement in relation to the restructuring of the fund’s wholly-owned subsidiary Boustead Holdings Bhd (BHB), said a source close to the matter.
The former chief of defence forces is also perplexed as to why LTAT announced he was retiring effective yesterday when he had submitted his resignation letter to the defence ministry (Mindef) on Feb 7, the source said.
“He was surprised and upset that the official announcement stated he was retiring,” the source said, raising the question whether this was just a mistake or was deliberate.
“Resigning and retiring are two entirely different things,” he added.
On why Raja Affandi tendered his resignation, the source said: “His resignation is meant to send a message that the LTAT (restructuring) plan should take precedence over Boustead’s wishes.”
A report in The Edge today quoted Raja Affandi as confirming he had resigned from his position but he declined to comment on the reason.
LTAT’s announcement on Raja Affandi’s “retirement” comes about a week after the abrupt departure of Ahmad Nazim Abdul Rahman as its CEO.
Nazim resigned after an initiative to “reset” BHB and its core companies was put on hold following the appointment of Khaled Nordin as defence minister on Dec 12. He succeeded Mohamad Hasan, who was appointed foreign affairs minister, in a Cabinet reshuffle.
The reset plan involved a delayering of Boustead Group and an overhaul of its governance and operating models, a source told FMT last week.
“In fact, Nazim warned that unless the revamp was carried out swiftly, up to half of LTAT would be at risk of being exposed to Boustead without any oversight, and without LTAT being able to exercise any control.”
He took the firm view that “a complete revamp was necessary” to address the financial challenges faced by both the company and LTAT, the source said.
BHB is said to pose a significant risk to LTAT because of its massive RM6.7 billion debt. LTAT, which manages the pension fund for members of the Malaysian Armed Forces and its veterans, has assets under management of close to RM11.54 billion as of Dec 31, 2023.
In a statement on Monday to clarify media reports over the delay in BHB’s restructuring, LTAT said no final decision has been made on the restructuring and the matter “remains under discussion with all relevant stakeholders”.
“LTAT views this matter both as a structural and an investment decision that will undergo various internal and external processes to ensure it is made in the best interest of the contributors,” it said, noting that BHB’s restructuring is a component of the larger LTAT Strategic Plan 2023-2025 (Mampan25).
“LTAT wishes to clarify it remains committed to ensuring the long-term sustainability of the fund and will continue to explore all investment options together with the relevant stakeholders, including regulatory bodies and the defence ministry,” the statement added.