KUALA LUMPUR — The Ministry of Finance (MoF) said today that the directors of 1Malaysia Development Bhd (1MDB) have confirmed that the fund cannot repay its debts since it was “insolvent”.
In a statement here, Finance Minister Lim Guan Eng also said that chief executive Arul Kanda Kandasamy explained he was on garden leave and unaware of the firm’s financial situation.
“The Directors of 1MDB confirmed that 1MDB was ‘insolvent’ and was unable to repay its debts. The former chief finance officer, Azmi Tahir, has also written to MoF in March 2018 to state that 1MDB will not able to service its interest due in April and May 2018.
“However, Arul Kanda when asked, highlighted that he is on ‘garden leave’ until the end of his contract in June 2018. Therefore, he claimed that he is in the dark as to the financial situation of the company,” Lim said.
Lim had two meetings to determine 1MDB’s financial status today, together with deputy treasurer-generals Datuk Siti Zauyah Md Desa, Datuk Ahmad Badri Mohd Zahir and Datuk Asri Hamidon.
The first meeting was with the Board of Directors, Datuk Norazman Ayob and Datuk Kamal Mohd Ali. The second was with Arul Kanda who was accompanied by the former CFO Azmi Tahir and former general counsel Ivan Chen.
The minister said Arul Kanda was absolutely uncertain of the value or existence of 1MDB’s “investments” — US$940 million (RM3.74 billion) “units” previously held with BSI Bank, Singapore and the US$1.56 billion overseas investment funds with 1MDB Global Investments Limited.
“It is completely unbelievable that a highly paid and ‘experienced’ investment banker can be so irresponsibly clueless as to not know whether RM9.8 billion worth of investments are even real,” Lim said, contrasting it with Arul Kanda’s tour to “explain” 1MDB on behalf of Barisan Nasional before the polls.
“I have found Arul Kanda to be utterly dishonest and untrustworthy, and instructed the legal advisers to the Ministry of Finance to review his position as the president of 1MDB.”
Meanwhile, Lim said the board claimed they have repeatedly disputed the value and even the existence of these investments during the monthly board meetings, since there was a lack of evidence in the past two years.
Yesterday, the DAP secretary-general said the MoF has been bailing out 1MDB’s debt service obligations since April last year.
The total amount paid by the MoF has amounted to RM6.98 billion, including payments to IPIC’s settlement agreement amounting to RM5.05 billion. – THE MALAY MAIL
Guan Eng: Arul Kanda now unsure if 1MDB’s RM9.8b fund units even exist
1MDB president and CEO Arul Kanda Kandasamy is unsure of the value of the firm’s ‘fund units’ investments, or whether these even exist, according to Finance Minister Lim Guan Eng.
“Arul Kanda… claimed that all financial matters were handled strictly by the CFO and he is absolutely uncertain as to what the value of these ‘investments’ are, or whether they even exist in the first place,” he said.
Lim was speaking to reporters after being briefed by Arul Kanda and other 1MDB officials at the Finance Ministry in Putrajaya this evening.
Arul’s latest claim contradicted his statement in an interview with Malaysiakini before the May 9 general election where he insisted that the value of the fund units were there.
Quizzed repeatedly by Malaysiakini, Arul was adamant that the US$2.5 billion was available for 1MDB to pay off the company’s debt.
In total, 1MDB previously claimed it held approximately US$2.5 billion (RM9.8 billion) in these fund units, of which US$940 million was held by its subsidiary Brazen Sky Ltd and another US$1.56 billion by a separate subsidiary 1MDB Global Investment Ltd.
However, the US Department of Justice claimed that these fund units were “relatively worthless” and was a front for money that had been stolen.
Lim said it is unbelievable that a highly paid and experienced investment banker can be so irresponsible and clueless as to not know whether RM9.8 billion worth of investments is even real.
Unable to service
Meanwhile, 1MDB’s chief financial officer Azmi Tahir, who was also present at the briefing, said the “investments” existed, according to Lim.
However, he said Azmi gave the “unbelievable excuse” that the fund managers refused to communicate with 1MDB in writing due to the ongoing investigations by the DOJ.
Lim said 1MDB directors had confirmed with him the state fund was “insolvent” and unable to repay its debts.
He added that Azmi himself had purportedly written to the Finance Ministry in March this year to say that 1MDB will be unable to service its interest payment due in April and May.
If 1MDB’s “investment units” supposedly worth RM9.8 billion could be redeemed, Lim said, this would be more than enough to pay back 1MDB’s financial obligations for the next few years.
However, it remains uncertain what has happened to these units. – MKINI
MALAY MAIL / MKINI
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