Minister: LTAT at risk of liquidity issues, Boustead Plantation sale needed

PARLIAMENT | Sale of Boustead Plantations Berhad is necessary to increase the assets liquidity of Armed Forces Fund Board (LTAT), the Dewan Rakyat heard today.

Defence Minister Mohamad Hasan said LTAT, which manages the pension fund for the armed forces, currently has assets liquidity of less than 20 percent.

This happened as the fund board had placed 56 percent of its investment into Boustead Holdings (Boustead), which is the parent company of Boustead Plantations.

According to the minister, by placing most of its investment "in one basket", LTAT is facing a huge risk should anything were to happen to Boustead.

"This is not a good thing, because it (LTAT) is a pension fund, it is not a strategic company that should hold assets.

"The most it can hold is 15 percent (in investments), as it must have liquid assets. But now LTAT's assets liquidity is less than 20 percent.

"If anything happens, LTAT will face trouble. So, what we want to do now is to address this issue by unlocking the value of assets that it possesses," he said.

Mohamad reveals that the plan was for Boustead to sell its stake in Boustead Plantations and use the gains to repay LTAT.

This would help LTAT to increase the liquidity of its assets to over 60 percent, he said while answering questions posed by opposition MPs on Boustead's move to sell its stake in the plantation arm.

PN MPs including Radzi Jidin (Bersatu-Putrajaya), Awang Hashim (PAS-Pendang), and Wan Ahmad Fayhsal Wan Ahmad Kamal (Bersatu-Machang) had urged the minister to stop Boustead from selling the stake to palm oil firm KLK, which had recently made an offer to acquire 33 percent of Boustead's stake in Boustead Plantations.

They argued that Boustead Plantations owns a large number of land plots in the country which should be kept within LTAT's possession, or at least the company can be sold off to other bumiputera corporations instead of non-bumiputera entities like KLK.

Mohamad told the Dewan Rakyat that he took note of the MPs' concern and would try to find the best solution to the issue.

"We will ensure that LTAT will not put all its eggs in one basket after this, like investing 56 percent into one single industry, which in this case is Boustead.

"This is dangerous.

"Rest assured, we are discussing with the Finance Ministry and we will try to find the best solution to solve Boustead issues, and at the same time make sure that the land plots under LTAT’s possession would not be lost," he ended.

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