'I didn't retire, I resigned'

KUALA LUMPUR: A poser over 'retire or resign" has cropped up following the departure of General Tan Sri Raja Mohamed Affandi Raja Mohamed Noor as chairman of Lembaga Tabung Angkatan Tentera (LTAT).

LTAT on Thursday announced that Raja Mohamed Affandi had retired effective immediately. But in his letter to Defence Ministry secretary-general Datuk Seri Isham Ishak sighted by Business Times, Raja Mohamed Affandi stated that he had resigned.

""I didn't retire, I resigned. Being fired, retiring and resigning are different. So when we resign, there's definitely a distinction," he said to Berita Harian, in response to the media statement by LTAT announcing his retirement.

When asked whether the issue of Boustead Holdings Bhd's restructuring and group governance was the reason he resigned, Raja Mohamed Affandi declined to comment. Instead, he said it is necessary to preserve the existence of the LTAT institution as best as possible.

He stated that according to the contract, his term as chairman of LTAT would end in August this year.

Raja Mohamed Affandi was appointed as LTAT's chairman on Aug 3, 2021, succeeding Tan Sri Mohd Zahidi Zainuddin who completed his service across three years from August 2018.

Insiders said his resignation can also be attributed to another reason.

"He feels that the board of LTAT was not given due regard in the decision process on the way forward on Boustead's restructuring plan. Boustead's views seem to have been given priority over LTAT board's," one of them said.

Raja Mohamed Affandi's departure came just a week after chief executive officer (CEO) Datuk Ahmad Nazim Abdul Rahman tendered his resignation.

Ahmad Nazim served LTAT for 31 months since his appointment to the CEO post on June 15, 2021.

The two departures came a month after it was reported that LTAT's planned restructuring had been put on hold. This was after a change of the head of the Defence Ministry, which oversees the fund.

In his resignation letter to new Defence Minister Datuk Seri Mohamed Khaled Nordin seen by  by Business Times, Ahmad Nazim pointed out that the minister had put LTAT's Strategic Plan 2023-2025 on hold via a letter dated Dec 15 last year.

Delaying any decision on restructuring LTAT's flagship company Boustead Holdings Bhd beyond January "would shorten the runway for the execution, and present a significant risk to the balance sheet of LTAT, and impact our ability to meet the minimum dividend target for this year".

He set himself a Jan 30 deadline for a further decision on the way forward for the plan, which aims to transform LTAT into a sustainable retirement fund.

"Given the lapse of time, I am afraid I could no longer pursue the mission and fulfil the mandate of my job," Ahmad Nazim said in the resignation letter.

LTAT declined to comment on the matter when contacted today.

But the fund had on Feb 5 said discussions with relevant stakeholders on the restructuring of Boustead, which is laden with RM6.76 billion debts, were on-going.

It added that at this juncture, no final decisions had been made on Boustead's restructuring and that any decision would undergo various internal and external processes to ensure it is made in the best interest of its contributors.

Ahmad Nazim took Boustead private last June.

Soon after, he proposed for LTAT and Boustead to dispose of 33 per cent of Boustead Plantations Bhd for RM1.15 billion to Kuala Lumpur Kepong Bhd to help reduce Boustead's debts of RM6.76 billion as at end-March last year.

The deal was called off in October last year and instead, LTAT is forking out RM1.15 billion to buy the remaining 32 per cent not owned by the fund and Boustead.

Meanwhile, Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan said with the resignation of the CEO and chairman, LTAT seems to have no plans yet.

"I find this very concerning, given their nearly RM7 billion debt. Furthermore, it seems that the BPlant disposal strategy has come to an end. The only silver lining is the hope for positive outcomes, especially for the shareholders, who are veterans.

"They now have a new minister, who may have ideas to navigate this situation. However, LTAT should at least release a statement indicating they have a plan or strategy. Contrary to this, stating they have no plans yet is very concerning and disturbing."

Azmi agreed that there is a big difference in resignation and retirement have a hug.

"Their resignation may be related to Boustead's restructuring and possibly influenced by the arrival of the new defence minister. So, I believe the primary issue lies in the restructuring of Boustead to alleviate the current debt burden."

He added that the falling through of the BPlant disposal is also likely linked to the CEO and chairman resignations.

"Perhaps the new minister has devised a new strategy to reduce Boustead's debt. However, when the CEO and chairman resign almost simultaneously, it must be related to Boustead's strategy, whether short-term or long-term, to alleviate the debt burden.

"I anticipate that in the coming weeks, the new chairman and CEO appointments will provide a fresh direction for LTAT and Boustead. I hope this new direction and strategy will benefit LTAT and its shareholders," Azmi said.

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