MOF under Najib agreed to RM5m ex-gratia for Arul Kanda?

EXCLUSIVE | The Finance Ministry, under the previous administration, agreed to an RM5 million ex-gratia payment for 1MDB president Arul Kanda Kandasamy and to place him on garden leave until his contract expired on June 30, according to sources.

Malaysiakini also sighted a correspondence between then finance minister Najib Abdul Razak and then treasury secretary-general Irwan Serigar Abdullah.

According to sources, half of the amount – RM2.5 million – is to be paid after Arul Kanda's contract expires. Malaysiakini could not confirm if the first instalment had been paid.

Malaysiakini could not reach Najib, his aides or Irwan for confirmation whereas Arul Kanda has not responded to requests for comments as well.

Last Wednesday, Arul Kanda, who is on a six-month contract, told Finance Minister Lim Guan Eng that he was on garden leave.

This implies he is in the process of leaving the firm but has been instructed not to come to the office. However, he still receives his salary.

Arul Kanda was among several key 1MDB officials to brief Lim on the status of the firm.

The Finance Ministry is the 100 percent shareholder of 1MDB.

Arul Kanda was brought into 1MDB in January 2015 when the company faced cashflow problems.

He was the chief architect of the "rationalisation" exercise to strip the company of assets and meet debt obligations.

Despite this, the new Pakatan Harapan administration revealed that Putrajaya had in fact paid RM6.98 billion on behalf of 1MDB to various creditors.

It has been confirmed that RM1.199 billion was redeemed from Khazanah Nasional Bhd in last August and a plot of federal government land was sold Bank Negara Malaysia last December to raise the necessary funds.

Najib has defended how his administration handled the servicing of 1MDB's debt.

Najib argued that the Finance Ministry was now in possession of 1MDB's assets - including prime real estate - and had to assume the company's debt obligations as well. -Mkini