KUALA LUMPUR – The continuation of procurements under the littoral combat ship (LCS) project will protect Lembaga Tabung Angkatan Tentera (LTAT) from financial losses, its chief executive officer Datuk Ahmad Nazim Abdul Rahman said.
He said if the project failed to proceed, the impending financial domino effect could result in a regression value of up to RM2.1 billion, which is 21% of the total retirement funds managed by LTAT.
If this occurred, he said, LTAT would not be able to continue to provide returns to contributors for at least the next six years.
“LTAT is exposed to significant potential losses through its majority stake in Boustead Holdings Berhad of 59.4% and its 61% effective stake in Boustead Naval Shipyard Sdn Bhd.
“The cabinet approval has prevented a financial catastrophe for LTAT and enabled LTAT to continue to focus on capital preservation and value enhancement in the long run, to ensure that LTAT’s financial position remains at a favourable level,” he said in a statement today.
Nazim said the cabinet decision would enable LTAT to provide sustainable and competitive returns to its contributors who are members of the Malaysian Armed Forces.
The proactive measures taken by LTAT together with the Defence Ministry, Finance Ministry, Royal Malaysian Navy, and the Cabinet Special Committee in finding a solution to the LCS procurement had taken into account all aspects.
“This includes the financial implications to the government as well as methods to improve governance to ensure all LCS vessels will be completed according to the set timeline.
“LTAT remains committed to providing full cooperation in ensuring that this recovery plan can be realised in the strategic interest of the country,” he said.
Yesterday, Defence Senior Minister Datuk Seri Hishammuddin Tun Hussein said that the cabinet meeting had unanimously agreed to continue with the LCS procurement.
The decision was made after taking into account two main factors, namely that LCS is a much-needed asset for RMN and there are 400 vendors involved in the project with financial expenditure of over RM4 billion. – Bernama, April 21, 2022
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