Ahmad Nazim Abdul Rahman described Boustead Holdings Bhd (BHB) as the “sword of Damocles” hanging over LTAT, while quoting Shakespeare to illustrate his view that a comprehensive rather than a piecemeal solution was needed quickly to resolve the board’s financial troubles.
Nazim resigned as LTAT chief executive in February after an initiative to “reset” BHB and its core subsidiaries was shelved. BHB is wholly-owned by LTAT.
In a report published by the Public Accounts Committee (PAC), Nazim said there was a need to “take the bull by the horns” to address the impairment risk to LTAT’s investments in the stock market.
Earlier, the PAC stated that critical cash flow problems and the numerous financial crises plaguing BHB and its subsidiaries had raised impairment risks up to 50% of the board’s fund value.
This amounted to almost RM5 billion of LTAT’s investments in the stock market, it said.
Nazim said there was a need to address the issue comprehensively as buying time would not only fail to resolve the matter but would see LTAT engage in a continuous battle with the audit department.
“If this is a story in Greek mythology, Boustead is the sword of Damocles hanging over LTAT.”
Nazim also compared issues affecting LTAT and BHB to a feather bed, where pressing down on the left side of the mattress would see the right side puff up and vice versa.
He said LTAT wanted to address the problem comprehensively once and for all, adding that “it could not be done on a piecemeal basis, let alone to leave it as status quo”.
“And as Shakespeare would have said, it is better to be three hours too soon than one minute too late.
“It is better to address the risk now than wait until it actually happens. So, that was the position that we took,” he added.
‘This plan or nothing at all’
Nazim said that after analysing multiple options, LTAT came up with a strategic plan that would see net profit increase from RM700 million this year to RM1 billion by 2025.
He added that he took a “very strong position” that LTAT has to meet its objectives and to achieve the ultimate aim of becoming a sustainable retirement fund.
However, he said when he received a letter from the defence minister on Dec 15 telling LTAT to put the plans on hold, the direction on how to implement the strategic plan became “unclear”.
“As chief executive, I took the position that it is either this plan or nothing at all.
“Either (we go with) this plan or I resign. And that was what I told the board of directors,” he said.
He added that his decision to step down also enabled the new management to come in and develop their own plan.