Spin, cries Arul Kanda over fraud remarks

1MDB president and executive director Arul Kanda Kandasamy has accused certain personalities of spinning his words over possible fraud in 1MDB.

Explaining his statement, Arul Kanda said he did not admit there was fraud in 1MDB but the company must be open to the possibility that it may have happened.

"I must clarify that I had never 'admitted there was fraud' as has been mistakenly alleged by various personalities and subsequently wrongly reported by certain media.

"What I did say is that, given the content of the April 12, 2016 statement by the Office of the Attorney-General of Switzerland, 1MDB must now be open to the possibility of fraud, i.e. that it cannot be discounted.

"It is regrettable that various personalities have chosen to 'spin' my words to further their own agendas," he added in a statement today.

Switzerland's OAG, in its statement on April 12, said it was expanding its investigation to focus on two former Abu Dhabi officials which dealt with 1MDB.

It said the unnamed former officials were suspected of fraud, criminal mismanagement, forgery, bribery, misconduct in public office and money laundering in connection with the deal to finance 1MDB's power assets acquisition.

The OAG also believes that money 1MDB was supposed to pay for the guarantee of this financing was diverted to the unnamed officials as well as a company related to the motion picture industry.

The OAG did not name the motion picture company but it came amid a US investigation into Red Granite Pictures, a company co-founded by Prime Minister Najib Abdul Razak's step-son Riza Aziz, on suspicion of receiving 1MDB's funds.

The UAE is also investigating the diverted money, which is believed to amount to at least US$3.5 billion which was supposed to have gone to a subsidiary of Abu Dhabi sovereign wealth fund International Petroleum Investment Company (IPIC) which guaranteed 1MDB's financing.

The money did not go to IPIC's subsidiary Aabar Investment PJS but was instead diverted to another company bearing a similar name that was registered in the British Virgin Islands.

Following this, Arul Kanda said there was a possibility of "massive fraud" in 1MDB with collaboration from the Malaysian side. -Mkini