By Kee Thuan Chye
Arul Kanda Kandasamy is not involved in any siphoning of
funds from 1MDB to the wrong pockets. He was brought in to head the company
long after the foul deeds had been done.
He was brought in to rationalise the company and bring it
back in the black. “Rationalise” might even have been a nice word used for his
job description – to mean cover up the dirt, if he found any.
Well, from the PAC (Public Accounts Committee) report and
some of the things he has said publicly, it appears that he did find dirt and
he did cover it up.
Many a time he has said the allegations against wrongdoing
by 1MDB were unfounded and politically motivated.
On April 1, he told The
: “The misunderstandings about 1MDB stem from the fact that what was a
business problem became politicised and became a tool by the Opposition or
those not aligned with the Government to topple a democratically elected prime
minister and government.”
But now he has openly admitted that 1MDB might have been
massively defrauded. More, he has also declared in an interview with The Edge Financial Weekly that “maybe
there was collaboration from our side”.
Maybe? He was supposed to investigate and find out for sure.
How could he say “maybe”? We are talking about billions of US dollars going
astray, and he says “maybe”? Has he failed in his job?
Or has he succeeded exceedingly well by way of not exposing
fraud when he discovered it? And is he still equivocating by saying “maybe”
when he could actually mean “certainly”?
Hiding the fraud would of course make him an accessory after
the fact. And when it comes to prosecuting the culprits, he should also be
MP Tony Pua, a member of the PAC and 1MDB’s closest
observer, has called Arul a “liar”. The fact that Arul has not defended his
honour by, say, suing Pua, suggests that the accusation is true.
What was it that Arul allegedly lied about?
In February 2015, he said in an interview with the Singapore
Business Times that 1MDB had redeemed
US$1.103 billion from its offshore account in the Cayman Islands and parked it
in a Singapore-based branch of Swiss bank BSI Bank.
“The cash is in our accounts … I can assure you … I have
seen the statements,” he attested. Note his confident tone.
But it turned out there was no cash. In May, the Government
admitted that the redeemed US$1.103 billion was actually in the form of “units”.
In June, 1MDB laughably sought to get Arul off the hook by
stating that he “never said he ‘saw the cash’” and that he was “on the record
as saying he had ‘seen the statements’.”
That was stupid. Anybody could see that Arul and 1MDB were
trying to twist words. After all, he also was on record saying “the cash is in
our accounts”, so how could he wriggle out of that?
Anyway, in October, Sarawak
published on its website minutes of a 1MDB board meeting that took
place in January 2015 at which Arul gave “detailed assurances to board members
that there was indeed cash in the so-called Brazen Sky company account at BSI
This cash-but-no-cash episode is very telling of what Arul’s
mission amounts to. Even more telling is the refusal of 1MDB under Arul’s watch
to provide details of the company’s foreign banking transactions to the PAC and
the Auditor-General. Such information is crucial in determining, for example,
whether a US$700 million transfer made by 1MDB to an account belonging to Good Star
Ltd was legitimate.
More significant than that are the billions of dollars of
unexplained payments – totalling at least US$3.51 billion – made to Aabar
Investments PJS Limited registered in the British Virgin Islands.
According to the PAC report, 1MDB has not clarified whether this
company was linked to the Abu Dhabi-registered Aabar Investments PJS that is a
subsidiary of International Petroleum Investment Corp (IPIC), which actually
declared to the London Stock Exchange this month that the Virgin Islands Aabar “was
not an entity” within IPIC or Aabar Investments PJS.
If the Virgin Islands Aabar is not a company that 1MDB had
legitimate business dealings with, then it is incumbent on Arul to provide the
essential information to set the record straight.
Why hasn’t he done it? Why did he not furnish the PAC with
the  required foreign banking
information? What is he trying to hide?
I could cite more instances of Arul’s seemingly dodgy
behaviour in divulging information to the public and the authorities, but I
think the main point is already clearly made.
As I said earlier, if he is hiding the truth, he is an
And now that he has acknowledged the possibility that there
was fraud and that 1MDB itself might have participated in the fraud, something
that he had been denying before, what is he going to do about it?
He was brought in to head 1MDB in January 2015 on a
three-year contract. He still has time left. And although, as he told The Star on April 1, that his job was to
turn 1MDB around and sort out its debt, and that “from my perspective, I’m
done”, he should know that he’s now in a very vulnerable position.
Should he merely confine his stint at 1MDB to just the brief
he was originally given when he now suspects that fraud has been committed?
Isn’t in in the interest of 1MDB to get down to the bottom of the fraud?
In fact, since 1MDB is Government-owned, isn’t it in the
interest of Malaysian taxpayers to know the truth? And since all Malaysians pay
tax these days at least in the form of the Goods and Services Tax (GST),
doesn’t this mean that all Malaysians have a stake in 1MDB and what it’s been
doing (or misdoing)?
So, is Arul Kanda going to carry out his duty to all
Malaysians or is he going to wash his hands of the matter? Is he going to care
for the financial well-being of the country or uphold the interests of his
The answer to that has become more pressing this week in
light of IPIC’s termination of the deal to slash US$3.5 billion of 1MDB’s debts
that has led to 1MDB defaulting on its payment of US$50 million interest for
bonds it issued.
This latest development has prompted Pua to warn that as a
result of it, “Malaysians need to brace themselves for the bailout of the
century of at least RM20 billion by the Malaysian government”.
If that should turn out to be true, the culprits that
started this whole 1MDB mess must be held accountable. Arul’s head should also
roll if he was not duly diligent in averting a disaster by coming clean with
the company’s dirt.
On April 1, he said, “We don’t need any money from our
shareholders to get us to 2039. There is no bailout of 1MDB.” What will he say
in the weeks to come?
Well, it looks like Arul Kanda could soon be due for his
comeuppance. For his own sake, he should decide now to do the right thing.
* Kee Thuan Chye is
the author of the current bestsellers Unbelievably
and Unbelievably Stupid Too!