MOF wants Arul to reimburse RM2.5m

The Finance Ministry has asked its lawyers to claim RM2.5 million that paid to former 1MDB president Arul Kanda Kandasamy as an ex-gratia payment earlier this year.

Finance Minister Lim Guan Eng told reporters at the Parliament lobby today that Arul Kanda was also liable to repay the ministry for decisions that cost 1MDB to suffer losses.

Lim declined to provide further details on the claims.

Ex-finance minister Najib Abdul Razak had approved a RM5 million ex-gratia payment for Arul Kanda earlier this year. Only the first half was paid. The balance was supposed to be paid on June 30 when Arul Kanda's contract expired.

Malaysiakini had reported on the ex-gratia payment in early June and it was confirmed by Lim in the Dewan Rakyat yesterday.

Lim said the ex-gratia payment was meant for Arul Kanda's work between Jan 1 and June 30 this year. At the material time, Arul Kanda was supposed to be on "garden leave", meaning that he was on the payroll without having to do actual work.

Following Lim's revelation, Najib had defended his decision to give Arul Kanda a hefty bonus because the latter had "succeeded" in reducing 1MDB's debt from RM50 billion to RM30 billion.

The former premier also claimed that Arul Kanda took a pay cut to take up the job at 1MDB.

Today, Lim said he was compelled to respond to Najib, because the latter was giving the impression that Arul Kanda was highly paid before joining 1MDB in early 2015.

"Recall that for the six months between Jan 1 and June 30, Arul Kanda was the only staff in 1MDB ... I question the credibility and integrity of the former prime minister who gave a nonsensical explanation (on the payment).

"If he wants to talk facts and figures, show proof that (Arul Kanda) was paid RM10 million annually or RM5 million for six months (before joining 1MDB)," said Lim.

Arul Kanda was brought in by the Najib administration to help restructure 1MDB's debt.

Damansara MP Tony Pua has pointed out that Arul Kanda's crowning achievement was to sell off 1MDB's profitable energy arm to China and transfer the remainder of its debt which is now being serviced by the Finance Ministry. - Mkini