AG Report: PPHM Unable To Meet Its Financial Obligations

KUALA LUMPUR, Feb 23 (Bernama) -- Perbadanan Perwira Harta Malaysia (PPHM) is said to be unable to meet its financial obligations as the total assets it owns are insufficient to cover its total liabilities.

According to the Auditor-General’s (AG) Report 1/26 tabled in the Dewan Rakyat today, PPHM recorded current assets of RM57.54 million and non-current assets of RM0.05 million as at Dec 31, 2024, against current liabilities totalling RM79.49 million.

“The audit’s objective is to assess PPHM’s financial position to ensure it has the ability to settle financial obligations after ceasing operations on May 31, 2025,” the report said.

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It noted that the current liabilities of the corporation, which is wholly owned by the Armed Forces Fund Board (LTAT), comprised amount owing to trade creditors of RM47.35 million, amount owing to LTAT of RM31.79 million, and amount due to various other creditors totalling RM0.35 million.

The audit analysis found that in 2024, PPHM’s trade creditors were owed RM47.35 million, including RM45.71 million for the Kuala Lumpur Air Base (PUKL) Relocation and Reconstruction Project post-negotiations and discounts, RM1.61 million for the Mahallah Project, and RM0.03 million for other trade creditors.

After a special board meeting on Feb 13, 2025, resolved for PPHM to cease operations, the LTAT property department took over the business of PPHM to manage its outstanding obligations 

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In line with this, the Auditor-General recommended that PPHM, through the LTAT property department, continue and finalise negotiations with the four PUKL project creditors who have not yet agreed to the settlement offer to finalise payments.

In addition, PPHM was also advised to accelerate the preparation of the Final Account Certificate and settle the remaining payments for Mahallah Project creditors, as well as analyse the financial position after the settlement with PUKL and Mahallah Project creditors to determine whether there is a surplus to settle amounts owed to LTAT.

The report further said that PPHM, in its response on Dec 12, 2025, informed that it had appointed professional advisors for a tax review to claim any excess taxes paid, and the proceeds from this claim would be used to settle PPHM’s financial obligations to all creditors.

PPHM also informed that talks with the four PUKL project creditors are expected to be finalised by the second half of 2026 at the latest.

The corporation said the remaining net cash on hand and in the bank amounted to RM3.90 million, after accounting for the RM4.33 million owed to PUKL project creditors that had been set aside via banker’s cheque.

-- BERNAMA