1MDB still has RM4b in Cayman Island, Arul Kanda now says

1MDB President and Group Executive Director, Arul Kanda Kandasamy speaks during the public forum on 1MDB at the PWTC in Kuala Lumpur, November 14, 2015. — Picture by Yusof Mat Isa
1MDB President and Group Executive Director, Arul Kanda Kandasamy speaks during the public forum on 1MDB at the PWTC in Kuala Lumpur, November 14, 2015. — Picture by Yusof Mat Isa

KUALA LUMPUR, Nov 14 — Close to RM4 billion in fund units remain in 1 Malaysia Development Bhd (1MDB) investment in the Cayman Islands, the sovereign company’s president Arul Kanda Kandasamy disclosed today, contrary to a previous statement where he said the money had been moved into a Singapore bank account.

He said 1MDB had made US$1.4 billion (RM7 billion) on top of the US$1.83 billion investment in the popular British-owned tax haven through a subsidiary Brazen Sky Ltd in 2014, and that the balance has stayed there after the fund redeemed the profit to pay off some of its debt.

“Brazen Sky was the end game of the PetroSaudi investment… in 2013 we invested US$1.83 billion in Brazen Sky but in 2014 the fund units grew to US$2.33 billion,” he told a public forum on 1MDB organised by Umno here, after a member of the audience asked the 1MDB president to explain Brazen Sky’s business.

“1MDB redeemed in cash US$1.4 billion in 2014 while the US$940 million has not been redeemed and will be used for IPIC,” he said, the latter referring to the Abu Dhabi-based International Petroleum Investment Corporation but without addressing the question posed to him.

Arul Kanda also did not elaborate on the deal with IPIC.

Questions surrounding Brazen Sky emerged after London-based whistleblower website Sarawak Report (SR) accused the 1MDB chief in April of distributing doctored financial statements to various parties on the firm’s assets held under the wholly-owned subsidiary into a Singapore branch of the Swiss BSI Bank.

In his reply back then, Arul Kanda said the cash in the Caymans had been fully redeemed and accounted for, while the balance had been sold to Aabar, a United Arab Emirates state investment fund.

But SR also claimed that the Swiss bank branch in Singapore told the republic’s authorities that the documents did not originate from them and do not represent the true picture of 1MDB’s assets.

The information was relayed to the Malaysian authorities last month.

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 the Singapore BSI, with the amount held in US dollars.

In a February interview Arul Kanda told Business Times the money was not returned home to Malaysia because the funds were to be used to service 1MDB’s US dollar debt interest payments.