Pua to Najib: Sack 1MDB CEO for 'lying' about Cayman cash

Arul Kanda told a 'Business Times' interview in February that this was because the funds were to be used to service 1MDB’s US dollar debt interest payments. ― Reuters pic
Arul Kanda told a 'Business Times' interview in February that this was because the funds were to be used to service 1MDB’s US dollar debt interest payments. ― Reuters pic

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KUALA LUMPUR, May 21 — 1Malaysia Development Berhad (1MDB) CEO Arul Kanda Kandasamy should be relieved of his responsibilities immediately for allegedly lying about the company’s recent Cayman Islands transaction, DAP MP Tony Pua said today.

The Petaling Jaya MP, citing conflicting responses from the Finance Ministry and Arul Kanda on the matter, said if allowed to stay on as CEO, Arul Kanda could become a stumbling block to the ongoing probe on 1MDB.

“His continued leadership of 1MDB will certain hamper the discovery of the truth and the culprits, which may result in further unbearable losses to the financially stricken company,” Pua said in a statement here.

“The Prime Minister, Datuk Seri Najib Razak and the board of directors of 1MDB will have no other choice but to immediately relieve Arul Kanda of his roles and duties in 1MDB.

“The failure to immediately sack Arul Kanda will further taint the Prime Minister and the Board of Director’s culpability for the monstrous sins of 1MDB,” he added.

In January, the Finance Ministry said 1MDB had deposited the US$1.103 billion (RM3.91 billion) it redeemed from its offshore account in the Cayman Islands into a Singapore-based branch of Swiss bank BSI Bank, with the amount held in US dollars.

Explaining why the funds were not repatriated back to Malaysia, Arul Kanda told a Business Times interview in February that this was because the funds were to be used to service 1MDB’s US dollar debt interest payments.

Arul Kanda, in clearing the air over the movement of the recently redeemed funds, said it was only “sensible” that the money stays in US dollars.

“There’s a very sensible and simple reason for that. We are keeping the money in US dollars as we have US$6.5 billion in bonds out there, in which interest payments come up to nearly US$400 million a year,” he was quoted saying in the report.

Yesterday, however, Pua revealed a parliamentary reply from the Finance Ministry claiming that the US$1.103 billion was in the form of “assets” and not in cash.

The news also contradicted a similar reply from the ministry on March 10 that said that the funds were fully redeemed and currently kept in BSI Bank in the form of US dollars.

“The above proved that Arul Kanda is an unscrupulous liar and a man without any honesty and integrity,” Pua said today.

“In effect, we know now that all the new 1MDB president executed was a ‘slight-of-hand’ transaction by just moving the “assets” to BSI Bank.

“He then pretended that the moving of assets to be a ‘redemption exercise’.  There was in fact no actual sale of the Cayman assets!” he continued, adding that these “assets” could even be worthless.

The US$1.103 billion is the second tranche of funds in 1MDB’s Cayman Islands foray, which totalled US$2.32 billion.

1MDB, Najib’s brainchild, is currently the subject of an investigation by the Auditor General’s Department and in line for further scrutiny by Parliament’s Public Accounts Committee.

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