KUALA LUMPUR: Defence Minister Datuk Seri Mohamed Khaled Nordin today said the negative balance in the Armed Forces Fund Board (LTAT) reserve, as flagged in the Auditor General's (AG) 2022 report, is not accurate.
This, Khaled said, is as the report only highlighted one of its three reserve funds.
"We wish to clarify that for the year 2022, our reserve was positive.
"There are three reserve funds, but the AG report referred to one fund. However, collectively, the funds show a positive balance, and this year as well, it is positive.
"It means that in 2022, it was positive, and in 2023, it was also positive… roughly around RM900 million of LTAT reserve funds last year.
"It means that the position of the reserve fund as raised in the AG report, saying it was negative is not quite accurate," he told reporters after attending the Royal Military College (RMC) Passing Out Parade today.
According to the AG report released on Wednesday (March 6), LTAT has been recording a negative balance in its reserve since 2020.
According to the executive summary of the AG report, the LTAT's reserve stood at RM0.376 billion in 2020 and RM0.285 billion the following year.
The report said the LTAT recorded RM0.338 billion last year.
The report also pointed out that there were 41 old, shared portfolios with an unrealised loss of RM0.662 billion yet to be taken until Dec 31 2023, which contributed to the negative balance of reserves.
Meanwhile, LTAT in a statement on Friday (March 8) said it remains robust and capable of fulfilling its obligations.
"We wish to clarify that the negative reserve of LTAT duly highlighted, is the other comprehensive income (OCI) reserve, which is just one facet of the combined reserve.
"LTAT's combined reserve is composed of three components, namely, retained earnings, reserve fund, and OCI reserve, which in combination, reflects our financial stability," it said.