1MDB lawsuit: Arul Kanda seeks to counterclaim nearly RM57m

Former 1MDB CEO Arul Kanda Kandasamy is seeking civil court leave to lodge a counterclaim of nearly RM57 million against the troubled Malaysian sovereign wealth fund.

1MDB also has a longstanding lawsuit against Arul Kanda over alleged breach of trust and conspiracy that caused the fund to suffer losses amounting to US$1.83 billion (RM8.05 billion).

Before the Kuala Lumpur High Court on Nov 17, Arul Kanda’s counsel from law firm Sanjay Mohan filed the application for leave to amend his statement of defence against 1MDB’s suit.

He is seeking to insert his counterclaim against 1MDB, with it being 1MDB’s alleged breach of an agreement to extend his employment with the fund back in 2018.

According to a copy of the bid, Arul Kanda (above) is seeking RM54 million in special damages, RM2.5 million in bonus payable pursuant to the employment extension agreement, as well as RM202,600 being loss of salary pursuant to the same contract.

Arul Kanda claimed that on Feb 23, 2018, he and 1MDB’s board of directors entered into the employment extension agreement - which was allegedly approved by the fund’s shareholder the Minister of Finance Incorporated (MOF Inc) - for his tenure to be extended until June 30 that year.

He alleged that the agreement included a clause for him to be paid an ex gratia bonus of RM5 million, of which RM2.5 million remains unpaid.

Arul Kanda claimed that the ex gratia bonus payment was a “result of his various achievements when employed by the plaintiff (1MDB) that led to the reduction of the plaintiff’s debt by approximately RM20 billion”.

Former prime minister and finance minister Najib Abdul Razak

The finance minister then was Najib Abdul Razak, the former prime minister who is serving a 12-year jail sentence over an RM42 million corruption case linked to SRC International, a former subsidiary of 1MDB which later became fully owned by MOF Inc.

Wrongful termination

Arul Kanda claimed that following the then-Harapan administration coming into power after the 14th general election in May 2018, the Finance Ministry was helmed by Lim Guan Eng, who allegedly made various allegations against him.

Arul Kanda also alleged that on June 25, 2018, 1MDB had wrongfully terminated the employment extension agreement without any basis.

He claimed he was not given the opportunity to address the alleged concerns by the Finance Ministry or 1MDB before the termination.

Arul Kanda further claimed that 1MDB had lodged a police report against him, which caused him in 2019 to be charged in court over the 1MDB audit report tampering case.

He pointed out that later on March 3 last year, the Kuala Lumpur High Court had discharged and acquitted him of the criminal case.

However, the prosecution has an appeal before the Court of Appeal to reverse the verdict.

Back in May 2021, 1MDB filed the main civil suit against Arul Kanda and former treasury secretary-general Mohd Irwan Serigar Abdullah for compensation over its losses.

The loss was over its investment in the joint venture 1MDB-Petrosaudi Limited, which was converted into the purported Brazen Sky Limited investment that is contended to be found in the Bridge Global Fund.

1MDB claimed that the duo committed a breach of trust and conspiracy by misappropriating its funds amounting to US$3.5 billion (RM15.4 billion), which was allegedly paid to Aabar Investments and US$1.265 billion that was purportedly paid to International Petroleum Investment Company, on May 9, 2017.

1MDB is represented by counsel Lim Chee Wee, while lawyer Lavinia Kumaraendran acted for Irwan Serigar. - Mkini