Restoring LTAT’s tainted legacy

Former prime minister Najib Razak and myself share one thing when it comes to Lembaga Tabung Angkatan Tentera (LTAT) — both our fathers were involved in its inception.

While Razak Hussein was the prime minister who made LTAT’s formation happen, my late father, former minister Sanusi Junid, first kick-started it by mooting for its formation in a Mingguan Malaysia article following which he was also recruited to bring about its establishment.

Regrettably, or perhaps fortunately, this appears to be the only thing which Najib and I have in common with respect to LTAT, as while he was in power, he allowed LTAT to be manipulated for his own political gain, whereas I am humbled by my appointment to the LTAT board from Q4 2018, understanding its key role in ensuring the welfare of our armed forces personnel, who are its pension-holders, with the hope also that our right actions will benefit my late father’s final accounting in the hereafter.

Since my first LTAT board meeting, I have been exposed to the various shenanigans perpetrated by the previous management, led by Lodin Wok Kamaruddin, apparently in many cases with the acquiescence and in some, under instruction from the previous Najib-led BN government.

Examples abound, from LTAT being forced to purchase the unpopular and overpriced AES traffic camera enforcement system from its exclusive vendors/contract holders based on a non-transparent valuation and also some rather dodgy land deals to prop up its profit and loss statement. Let’s explore the latter.

In 2016, LTAT found itself likely unable to issue its unsustainable inflated dividends for the year, what with its many investments underperforming.

Nevertheless, Najib demanded a strong LTAT dividend announcement for fear of the armed forces votes should elections be called in 2017.

So, this is what the then LTAT CEO, Lodin Wok Kamaruddin executed; he signed two sale and purchase agreements in December 2016 to sell two pieces of LTAT land to the following buyers:

a) Boustead Construction Sdn Bhd, a wholly-owned subsidiary of Boustead (with Lodin also the managing director of Boustead at that time); and,

b) another private company.

He then immediately recognised the income of RM238.8 million even before the completion of the sales in 2016 itself; i.e., the transactions were not yet completed, no payments completed, no land titles changed, nothing, but LTAT in its accounting books recognised these “sales”.

When he was again in trouble in 2017, Lodin did the same thing. He signed another two sale and purchase agreements to sell two pieces of LTAT land and immediately booked the income of RM202.7 million without even completing the transactions.

For Lodin, it seems as long as the sale and purchase agreements are signed, LTAT would be able to book a handsome profit, allowing it again to issue unsustainable inflated dividends for 2016 in 2017. Unsurprisingly, the auditor-general has a different opinion.

The reality though is simply that these land transactions never really occurred, even till 2018. As a result, come 2018, when the land sale could not be concluded, the sale of land had to be reversed.

This revealed the truth that LTAT’s management in 2016 and 2017 had effectively created transactions to show high profitability, simply to allow for a higher dividend payout in 2016 and 2017, as demanded by their Barisan Nasional masters in government, Najib, in particular.

We carry the burden of the earlier leadership’s misconduct in LTAT till today, with armed forces personnel and pensioners being the ultimate victims. This is just one example of the many elements of misconduct perpetrated by the former LTAT management, led by Lodin.

Other examples include tens of millions of ringgit squandered on a dodgy coal mining company, hundreds of millions of ringgit bailing out BN government cronies such as the aforementioned AES system contract holders, etc, ad nauseam.

In short, the story of LTAT is familiar; as with Tabung Haji, its past management chose to hide their failures and institutional corruption by issuing inflated dividends despite depressed profits for years.

The result is a threat to what should be an incredible legacy, once admired the world over. As an LTAT board member, I am relieved that we have at least closed the book on 2018 with integrity and are able to guide more able management towards profitability in the coming years.

The 2% dividend is disappointing, but it is real. We would rather be honest than lie as we fight to rebuild this legacy that is LTAT for the benefit of those who defend our country.

Shame on you Najib for squandering another one of your father’s fine legacies to the nation. Shame on you for now trying to hide your wrongdoings by now leading the attack on the 2% dividend LTAT is issuing this year, a figure that came about as a result of your indecent and irresponsible misconduct in the years past as the finance minister and prime minister.

Shame on you for making your cousin Hishammuddin Hussein forget his own father’s legacy as a military man, forgetting that it’s the soldiers that matter, not your political future!

Akhramsyah Muammar Ubaidah Sanusi is an independent member of the LTAT board of directors. This letter is his personal view and not that of LTAT or any other entities he is associated with.

The views expressed are those of the author and do not necessarily reflect those of FMT.