Probe Arul Kanda for covering up multi-billion dollar scam, says Pua

1MDB boss Arul Kanda Kandasamy should be probed for covering up the 1MDB-IPIC-Aabar multi-billion dollar scam, said DAP lawmaker Tony Pua.

While agreeing that the transfer totalling US$3.51 billion to British Virgin Islands-incorporated Aabar Investment PJS (Aabar BVI) happened before Arul Kanda assumed office in January 2015, he claimed the latter was fully aware of the fake Aabar BVI.

The most damning evidence was Aabar BVI had been wound up 10 months ago in June 2015, six months after Arul Kanda helmed the state-owned fund, he said.

How could Arul Kanda be ignorant of the fact that a company ceased to exist after receiving 1MDB's fund totalling US$3.51 billion, he asked in a statement today.

This included US$1.367 billion of “refundable security deposit”, US$993 million of “refundable options termination payment” and US$1.15 billion of “top-up security deposit”.

With Aabar BVI no longer in operation, Pua said, the US$3.51 billion which was reported as 1MDB's overseas cash flow that was unaccounted for, is definitely missing now.

"In fact, all the 1MDB agreements signed with Aabar BVI as disclosed by the auditor-general and the Public Accounts Committee (PAC) are now completely void," Pua said.

"The question now is, why did Arul Kanda hide this information from Malaysians and failed to institute action against the relevant parties in the obscene scam, including 1MDB officials involved, the bogus Aabar BVI and its officers?

"Arul Kanda’s appointment was in January 2015, six months before Aabar BVI was liquidated. If he hid this crucial information, then he must be investigated for being an accessory to the entire scam," he said.

'PAC report twisted'

Both IPIC and its subsidiary Aabar Investments PJS had denied any links with BVI Aabar via a statement to the London Stock Exchange.

1MDB, which is surprised by the development, claimed it thought Aabar BVI was jointly owned by IPIC and Aabar.

Pua, who is also a PAC member, encouraged the people to read for themselves the PAC report on 1MDB that was uploaded to its website.

The report was twisted and turned to avoid answering question directly as to who owned Aabar BVI, he claimed.

According to Pua, Arul Kanda claimed that Aabar BVI was linked to Aabar.

The PAC proceedings proved that Arul Kanda was aware of the entire scam and hid this information from the auditor-general and the PAC, hoping that “we will turn a blind eye on the matter”, he added.

"If he hid this crucial information, then he must be investigated for being an accessory to the entire scam," he said.

Prime Minister Najib Abdul Razak had said 1MDB will leave behind a legacy – Tun Razak Exchange and Bandar Malaysia that will be remembered.

Najib also claimed 1MDB had repaid the RM950 million standby credit given by the government.

Soon after, 1MDB issued a statement claiming that Arul Kanda had delivered major asset sales and repaid all short-term debt/bank debt, with 1MDB now having RM2.3 billion cash in bank.

Sheer disbelief

"Even Pua has no choice but to admit this success, against all odds," said the state-owned fund in a statement.

But Pua countered: “Only in Malaysia can someone bragged about how he was able to dispose of assets at a loss and use the proceeds to repay an even smaller fraction of the debts incurred."

He said that he had to shake his head in sheer disbelief when he read how 1MDB boasted its of achievement.

"I am left speechless that Arul Kanda, a so-called top investment banker and debt-restructuring expert, can shower himself with such hugely undeserved praise," he added.

"Perhaps, he has forgotten that he has been forced to admit that the power plant assets which were acquired for RM12.1 billion were sold for a loss at RM9.83 billion.

"The proceeds were used to pay off RM950 million of the federal government’s emergency loan granted last year. However, US$3.5 billion (about RM13.6 billion) worth of bonds which were raised to purchase these power plants remains outstanding!" he said.

"So his achievement was to dispose of overpriced power plants at a loss, and leave 1MDB with a gaping hole of US$3.5 billion of related-debts in 1MDB’s books, with no assets left to pay back?" he asked.

"Then, I have no choice but to admit that I am flabbergasted by Arul Kanda’s definition of success, against all odds," he said. -Mkini