PARLIAMENT | Legal amendments giving the Armed Forces Fund Board (LTAT) broader investment powers have been passed in the Dewan Rakyat with a voice vote.
It will allow the board - which manages pensions for veterans - to deposit monies in local or overseas banks and financial institutions as investments, among other measures.
Other investment measures now open to LTAT in Malaysia or abroad include acquiring movable or immovable properties, property and infrastructure development, as well as any products approved by the Securities Commission (SC) or its foreign counterparts.
The bill - which amends the Armed Forces Fund Act - also empowers the board to incorporate companies.
Other amendments seek to instil good governance in the board, by requiring that members be free of criminal convictions and be made individually responsible for any losses as a result of non-compliance or violation of any provisions.
Deputy Defence Minister Ikmal Hisham Abdul Aziz said the bill will help LTAT diversify its assets to minimise investment risks.
However, several MPs voiced concerns about the amendments as well as on LTAT's track record.
Opposition leader Anwar Ibrahim, in debating the bill, asked the government to explain the need to allow LTAT to put funds in offshore accounts and whether it had already done so.
"Is such an action not a transgression and wrong? We should use funds available to invest domestically. If not we would be in the same cart as those named in the Pandora Papers," he said.
The Pandora Papers is a trove of leaked documents belonging to financial service firms that facilitate the wealthy all around the world - including Malaysia - to set up and manage offshore entities in tax havens.
It is not illegal to own offshore entities but they can potentially be abused to conceal wealth abroad or for tax evasion.
Ikmal Hisham clarified later that LTAT does not have offshore investments at the moment but does plan to invest in overseas markets.
‘LTAT has been mismanaged’
Anwar (Pakatan Harapan-Port Dickson) also stressed that LTAT must be free of political interference.
He said this is to ensure that the funds benefit veterans - especially those in the B50 income bracket - and not elites who want to enrich themselves.
His warnings were supported by Tajuddin Abdul Rahman (BN-Pasir Salak) who said LTAT had been chronically mismanaged.
Meanwhile, former transport minister Anthony Loke (Harapan-Seremban) said one example of political interference in LTAT was how it was used by the Najib administration to bail out the traffic automatic enforcement system (AES) project.
LTAT had been instructed by the government to take over the two AES concessions at a cost of RM555 million but audit firm KPMG valued the projects at a maximum of RM251 million.
Besides expanding the fund's investment scope, the amendments also provide a government guarantee for monies to depositors.
In the event the fund cannot make payments to depositors, the fund can get an advance from the government’s Consolidated Fund, which must be repaid as soon as possible. - Mkini
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