AUDITOR-GENERAL’S REPORT: PTSB’S SPECIFIC FUNCTION APPROVAL CAN’T BE CONFIRMED

KUALA LUMPUR, August 3 (Bernama) -- The approval for the specific function of Perwaja Terengganu Sdn Bhd (PTSB) to handle the repayment of loans to the government through the disposal method of RM4.59 billion could not be confirmed due to the lack of relevant documents.

According to the Auditor-General’s Report 2021 Series 1 released today, the special purpose vehicle (SPV) has been established to carry out special functions whether with the approval of the Minister of Finance based on the Minister of Finance (Incorporation) Act 1957 (Act 375), the decision of the cabinet meeting, the decision of the Economic Action Council or the budget speech.

“A review on files obtained from the National Archives has been made on Jan 24, 2022. However, information regarding the establishment/approval was not found,” it said.

It said based on the federal government loan balance statement on Dec 31, 2008, PTSB has a loan balance to the government amounting to RM4.59 billion, covering loans between 1988 and 1999 to finance PTSB’s financial needs, interest payments, debt settlements and refinancing.

The report said the audit review found that a total of RM575 million was disposed of as of Dec 31, 2021 through the arrangement of the annual budget.

“An audit review of the remaining loan disposal for the period from 2018 to 2021 found that as much as RM50 million in annual disposal of part of the government’s annual loan to PTSB has been supported with the approval from the secretary general of treasury for the distribution of allocations for write-off purposes,” it said.

PTSB was established on April 22, 1982 as a limited company according to shares owned by the Ministry of Finance (MoF) with a shareholding of 87.1 per cent while the remaining 12.9 per cent is held by Tabung Amanah Warisan Negeri Terengganu (TAWNT).

PTSB was assigned the special task of handling the repayment of loans to the government with a gradual disposal method.

Meanwhile, the audit report found that the federal government has more than 50 per cent interest in the paid-up share capital of 26 SPVs, amounting to RM2.39 billion, as of December 2021.

Overall, it said five SPVs have successfully achieved their specific functions while 18 SPVs are currently implementing their specific functions and two SPVs have changed the direction of their specific functions.

The audit report recommended the Government Investment Companies Division (GIC) and MoF to follow up with the Terengganu state authorities regarding the loan payment by TAWNT, amounting to RM126.5 million, which has not yet been received.

It also recommended the GIC and MoF to consider monitoring the compliance of the Guidelines for Board Members Appointed by the Minister of Finance (Incorporated) by SPVs to ensure good corporate governance practices and the activities could be managed in an orderly and efficient manner.

-- BERNAMA