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31st October 2020

LTAT (Armed Forces Fund Board) has been granted an extension until February 2, 2021 to decide on its proposed privitisation plan for Boustead Holdings Bhd (BH). This is the second extension given by the Securities Commission Malaysia since LTAT first announced the privatisation plan in May. The apparent indecision reflects poorly on the management and is unfair to investors. 
The privatisation plan has an offer price of 80 sen per share. Indirectly this puts a cap to the rise beyond 80 sen in BH shares and pressing down the shares price of its four listed companies - Affin Bank Bhd, Boustead Plantations Bhd, Pharmaniaga Bhd and BHIC. Many feel the 80 sen per share is unfair because BH’s net tangible assets without revaluation of its many good assets is RM 1.76. If the four listed companies can post their true results and the shares price not pressed down, their respective market capitalisation will push up BH’s market capitilisation and share price.  
In July, BH had announced its transformation plan for the next three years. No detail is heard of this plan so far. The boards of LTAT and BH seem to be only good at making announcements, but not at decisive actions. The boards failed to provide clear directions for the group. When investors, both institutional and private, buy shares of companies they buy into clear direction the companies have in store.  
When there was consistent bad press towards BHIC and the contractor, Boustead Naval Shipyard, regarding the non-delivery of the six littoral combat ships (LCS), the management of LTAT and BH Group remained mum. Any good corporate leader would have immediately defended its position or at least tried to minimise the damage. In fact, it was Patriot that tried to defend LTAT and BHIC by suggesting ways to bring value to the shares so that military personnel, the main stakeholders, could benefit. Patriot had also criticised the authorities for not acting against certain parties for pressing down of BHIC shares. To this day shares manipulation is still going on. This is obvious during the last 15 minutes of the Sell-Q and Buy-Q of the trading screen. 
Regarding the LCS project, Patriot had explained the problem lies equally with Mindef and the government because of their procrastination in approving the variation orders and the extension-of-time requested by the contractor. There is so much value in BHIC that even those in the corporate circles could see, but blind to those inside.  
Patriot has for umpteen times mentioned that only competent people be appointed to the boards in LTAT and the BH Group. Politicians should not be appointed to fit into the politics of patronage agenda. Cronyism and the practice of partiality in GLCs is a cancer that festers into eventual bankruptcy. In the case of LTAT and BH Group it will be the military personnel that will be at the losing end when companies do not perform because of incompetency of those appointed. 
Concerning the RM 1 billion unaccounted for in the LCS project, as mentioned by former deputy defence minister Liew Chin Tong, no stone should be left unturned to recover that sum. So far RM 5.94 billion has been paid out of the total RM 9 billion LCS project. This missing RM 1 billion might not have gone into the BHIC/BNS account and the funds appear to have been diverted.  
Mindef and the defence minister must quickly provide answers. The management of LTAT and BH Group must not cover up any crime committed if the RM 1 billion was illegally misappropriated.  
BG Dato Mohamed Arshad Raji (Rtd) 
President, Persatuan Patriot Kebangsaan