LTAT and Boustead Holdings: The Armed Forces Fund and Its Corporate Arm

Every Malaysian soldier and sailor sets aside a portion of their salary in one and the same place — and that money, for years, hinged on the fate of a debt-laden conglomerate. This is the story of LTAT and Boustead Holdings.

What is LTAT and whom does it protect?

The Armed Forces Fund Board (Lembaga Tabung Angkatan Tentera, LTAT) is a statutory body established under the Armed Forces Fund Act 1973 (Act 101). It functions as the retirement fund for members of the Malaysian Armed Forces (MAF) — the equivalent of the EPF but dedicated to service personnel.

For mandatory contributors (Other Ranks personnel), 10% of the monthly salary is deducted as a contribution, and the government tops it up by 15% — meaning 25% of the salary is credited each month. Voluntary contributors, meanwhile, may contribute between RM25 and RM2,000 a month.

Returns to contributors have stayed stable in recent years. For financial year 2023, LTAT declared a 5% dividend totalling RM485.08 million to 123,380 contributors. For financial year 2025, the dividend rose to 5.35% (RM524.74 million) — its highest payout since 2017.

Snapshot	Details
Established under	Armed Forces Fund Act 1973 (Act 101)
Type	Statutory body / retirement fund
Mandatory contributors	10% salary + 15% government
Voluntary contributors	RM25–RM2,000 a month
FY2023 dividend	5% (RM485.08 million, 123,380 contributors)
FY2025 dividend	5.35% (RM524.74 million)
Chief Executive Officer	Mohammad Ashraf Md Radzi
Chairman	General (Rtd) Tan Sri Azizan Ariffin

How did Boustead become LTAT’s corporate arm?

A large share of contributors’ savings is invested not in bonds or listed equities, but in Boustead Holdings Berhad — a conglomerate spanning plantations, pharmaceuticals, heavy defence industry, property and trading.

When Boustead’s performance deteriorated, LTAT decided to take over the company entirely. Through a voluntary takeover offer for the remaining 40.58% of shares at 85.5 sen (valued at RM703.2 million), LTAT’s holding rose to about 97.63%. As a result, Boustead Holdings was delisted from the Main Market of Bursa Malaysia on 28 June 2023, in line with Paragraph 16.07(a) of the Listing Requirements.

The consolidation also involved the group’s subsidiaries. Boustead Plantations was taken over entirely at RM1.55 per share — about RM1.11 billion to buy the remaining 32% — raising the LTAT and Boustead holding from 68% to 100%.

Key strategic holdings	Estimated holding
Boustead Holdings Bhd	~100%
Pharmaniaga Bhd (pharmaceuticals)	~54.9%
Boustead Plantations Bhd (plantations)	100% (delisted)
Affin Bank Bhd (banking)	~22%

Why does LTAT need to be rebalanced?

The problem was not merely one weak company, but the structure of the fund itself. LTAT was overexposed to strategic assets that delivered low returns — estimated at only around 2.9% — compared with its far smaller fixed-income exposure.

The earlier recovery plan, Project Moonshot, has been suspended since 2023, leaving the Boustead group with a debt burden of about RM3.4 billion. The Public Accounts Committee (PAC) in November 2024 warned that further delay could force LTAT to dispose of assets, with Boustead’s financial troubles potentially eroding up to half of LTAT’s funds — about RM5 billion of contributors’ money out of total assets of around RM11.5 billion.

In its place, LTAT introduced Project Earth — approved by the board on 9 August 2024 and reported to the Cabinet on 13 December 2024. Its target: to reduce strategic-asset holdings from around 56% to 35% within three years, while raising the fixed-income allocation to 20%–25%. According to Chief Executive Officer Mohammad Ashraf Md Radzi, the fund manages assets of about RM13.6 billion and aims to avoid a “fire sale” by monetising assets in stages — including the possible re-listing of units such as Boustead Plantations once their finances recover.

What comes next

Project Earth is still in the early stages of implementation, and its success depends on LTAT’s ability to monetise assets without harming contributor value. Things to watch: the annual dividend rate (an indicator of the fund’s health), progress in reducing strategic holdings towards 35%, the resolution of the Boustead group’s debt, and any re-listing of subsidiaries. For official information, refer to LTAT’s annual reports and Ministry of Defence announcements.