AG Report: 24 Subsidiaries of Five Federal Agencies Record Losses For Three Consecutive Years
KUALA LUMPUR, Feb 23 (Bernama) -- A total of 24 out of 42 subsidiary companies under five federal agencies recorded losses for three consecutive years from 2022 to 2024, according to the Auditor-General’s Report 1/2026 released today.
“In 2024, 24 subsidiary companies recorded total losses amounting to RM466.57 million, comprising 10 subsidiaries operating domestically and 14 operating overseas,” the report stated.
Based on the audited financial statements of the subsidiaries for the financial year 2024, the reported losses took into account impairment or write-downs and interest payments to parent agencies in accordance with the applicable accounting standards.
Among the federal agencies with subsidiaries reporting losses were the Employees Provident Fund (EPF), the Federal Land Development Authority (FELDA), Retirement Fund (Incorporated) (KWAP), Lembaga Tabung Haji (LTH) and the Armed Forces Fund Board (LTAT).
The report further noted that 80 (37.9 per cent) out of 211 subsidiary companies in 2024 paid dividends totalling RM2.634 billion to 30 federal agencies. Nine (11.3 per cent) of the 80 subsidiaries paid dividends amounting to RM0.936 billion to four federal agencies despite recording losses.
“Audit analysis found that 45 subsidiary companies paid the highest dividends to five federal agencies, amounting to RM2.539 billion,” the report added.
As of Dec 31, 2024, loans and amounts owed provided by 46 federal agencies to 118 subsidiary companies totalled RM15.322 billion. This comprised loans to 15 subsidiary companies amounting to RM2.841 billion and amounts receivable from 103 subsidiaries totalling RM12.481 billion.
In 2024, 105 federal agencies recorded a current surplus after tax and zakat amounting to RM87.213 billion, while 38 federal agencies recorded a current deficit after tax and zakat totalling RM1.248 billion.
“Overall, the current surplus of federal agencies was contributed by income generated from core activities and the addition or repayment of federal government grants, as well as returns from investment interest. Meanwhile, current deficits were due to declining revenue, increased operating expenditure and impairment of investments,” the report stated.
The report recommended intensifying efforts to effectively increase revenue generation to ensure federal agencies can continue operating on a going-concern basis and are able to meet loan repayment commitments without continuous financial support from the federal government.
In addition, ministries should review the direction and business plans of subsidiary companies that have incurred losses for three consecutive years and failed to provide reasonable returns, as well as assess and consider closing subsidiaries that have been dormant or inactive for more than five years.
-- BERNAMA
