LTAT’s board had appointed accounting firm Ernst & Young to undertake a position assessment in February 2018 to enhance corporate governance.
The assessment found that prior to 2019, LTAT had accumulated an investment portfolio with substantial risks and asset quality issues. LTAT chairman, Gen Mohd Zahidi Zainuddin said among key findings were that retained earnings were impacted due to overpayment of dividends, and overstatement of LTAT’s assets between 2015 and 2017.
Zahidi said the failure to impair one of its large investments had resulted in an overstatement of LTAT’s assets between 2015 and 2017.He said the financial and technical due diligence exercises were also not properly undertaken by LTAT prior to investing in the above company, and not based on sound investment policies and procedures.
Other key findings of the position assessment also include heightened risk of over-reliance and liquidity issues since 2014 as well as outstanding dividends from subsidiaries that were not paid in full and are still outstanding up to this date. “Neither LTAT nor the members were able to manage their unit trust holdings until the point of retirement.