Deputy minister says these long-dormant companies can only be dissolved upon settling their debts, legal claims and undergoing liquidation process.
Deputy finance minister Liew Chin Tong said while some companies had been dormant for more than five years with no management or commercial activities, they could not be dissolved due to financial obligations, such as debts that needed to be settled.
“Furthermore, there are also companies that are undergoing the liquidation process or facing legal claims that need to be resolved first.
“Only after all these issues have been resolved can a firm be dissolved,” said Liew while winding up the debate on the 2026 Auditor-General’s Report Series 1 for the finance ministry.
He was responding to MPs who asked about action taken by the government in managing companies that had been dormant for more than five years.
According to the audit report, 36 dormant companies with net liabilities totalling RM1.248 billion required continued support from the government, agencies or parent companies to settle their financial obligations.
A total of 116, or 18.1% of the 641 federal companies, were identified as dormant, with 62 of them having been dormant for five years or more.
Loss-making KWAP subsidiaries
The audit report also flagged 10 out of 19 subsidiaries owned by Retirement Fund Incorporated (KWAP) for losses totalling RM93 million.
Liew said six of these firms recorded losses for three consecutive years due to three factors — low occupancy rates for buildings owned, their capital structure and strategic investment structure.
He cited CapsSquare Tower Sdn Bhd, which owns Caps Square Tower, as an example, saying the skyscraper recorded an occupancy rate of around 42% in 2024. This directly affected the company’s rental income and, in turn, financial performance.
He said a few subsidiaries recorded losses due to interest payments on shareholder loans from KWAP. “However, from an operational standpoint, these companies actually recorded a good occupancy rate of up to 100% and made a profit before factoring in the interest costs.”
Liew said four subsidiaries were established with tax efficiency in mind, specifically to enable capital gains tax exemptions in the event of future disposals of real estate assets.
“This approach is a long-term investment strategy to optimise net returns to the fund and comprehensively protect the value of the investment.” - FMT
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