Kuala lumpur: A total of 24 out of 42 subsidiary companies under five federal agencies have reported losses for three consecutive years from 2022 to 2024, as detailed in the Auditor-General's Report 1/2026 released today.
According to BERNAMA News Agency, in 2024 alone, these subsidiaries reported cumulative losses amounting to RM466.57 million, with 10 subsidiaries operating domestically and 14 operating overseas. The financial assessments, based on the audited statements for the fiscal year 2024, included considerations of impairments, write-downs, and interest payments to the parent agencies, adhering to the applicable accounting standards.
The report identifies 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) as among the federal agencies with subsidiaries that have been consistently in deficit. Despite these losses, the report notes that 80 out of 211 subsidiary companies managed to pay dividends totalling RM2.634 billion to 30 federal agencies. Notably, nine of these subsidiaries paid dividends amounting to RM0.936 billion to four federal agencies despite recording losses.
The audit analysis further reveals that 45 subsidiary companies disbursed the highest dividends to five federal agencies, reaching a total of RM2.539 billion. By the end of 2024, loans and amounts owed by 46 federal agencies to 118 subsidiary companies amounted to RM15.322 billion, which included loans to 15 subsidiaries amounting to RM2.841 billion and amounts receivable from 103 subsidiaries totalling RM12.481 billion.
For 2024, 105 federal agencies recorded a current surplus after tax and zakat amounting to RM87.213 billion, while 38 agencies reported a current deficit after tax and zakat totalling RM1.248 billion. The report attributes the current surplus to revenue from core activities, federal government grant additions or repayments, and investment interest returns. Conversely, deficits were driven by declining revenue, increased operating expenditure, and investment impairments.
The report advocates for enhanced revenue generation strategies to ensure the continued operation of federal agencies on a sustainable basis and to meet loan repayment commitments without continuous federal government support. It also recommends that ministries reassess the direction and business plans for subsidiaries incurring prolonged losses and consider closing those that have remained inactive for more than five years.