1MDB president Arul Kanda Kandasamy has compared himself to a mechanic trying to ‘fix’ the company, saying that the problems that have been plaguing the state investment fund did not begin under his watch.

He mentioned this twice during a townhall session with University of Malaya students yesterday – once during his speech and once during the question-and-answer session.

Arul was asked by a student why he was still in 1MDB, given that the directors and chief executive officer of an ordinary company would have been sacked if such problems occured.

“Why am I still here? Like I have said earlier, I’m a mechanic. I want to be part of the solution.

“I have expertise in law, finance and restructuring of companies. At least I have stood up to help,” Arul said in response.

A video recording of the event was uploaded by the Universiti Malaya Association of New Youth (Umany).

Malaysiakini also obtained a voice recording of the event, although organisers told participants recording was not allowed.

He said that 1MDB was now in a stable position since it no longer owed any short-term debts or bank loans, and had US$2 billion in cash after selling Edra Global Energy Bhd.

He also denied allegations that Edra was sold at a loss and would compromise national interests as it was sold to a China state-owned company.

He explained that power companies had power purchasing agreements that lasted until a certain time. That time period had been shortened when 1MDB sold Edra, hence reducing its value below the original purchase price.

In the meantime, however, 1MDB had earned dividends from the purchase, he said.

Arul added there was nothing wrong with having foreign interests in the local power supply as long as it was well-regulated, and this was also done in countries such as Singapore and the UK.

In Malaysia, he said, there was a reserve margin of 25 percent in the power supply.

“Even if you close all (of Edra’s) power plants, there would still be enough buffer supply.”

Earlier, he also told students that 1MDB’s Tun Razak Exchange project was making progress, while three out of eight military camps to be built as part of the Bandar Malaysia project had already been completed. The rest of the camps were nearing completion.

'1MDB not involved in DOJ suit'

Asked about the US Department of Justice’s (DOJ) civil suit to confiscate properties supposedly bought with money misappropriated from 1MDB, Arul maintained that 1MDB was not involved in the suit and no money was missing.

He said the money was paid to Aabar in the British Virgin Islands (BVI) as instructed by Aabar’s directors, and as part of an agreement with Aabar. It was meant as a deposit for Aabar to guarantee bonds issued by 1MDB.

In addition, he said 1MDB and its auditors had taken steps to verify that the company indeed belonged to Aabar, a subsidiary of the International Petroleum Investment Company (IPIC).

“Under the agreement, as long as the bonds (co-guaranteed by Aabar and 1MDB) have not yet matured, Aabar BVI has the right to use the deposit.

“So when the DOJ claimed that Aabar BVI had made payments, it was not within 1MDB’s responsibility or knowledge.”

IPIC and Aabar now claim they are not affiliated with Aabar BVI and have never received 1MDB funds. They are now involved in a dispute with 1MDB and the Ministry of Finance Incorporated that is now before the London Court of International Arbitration.

Arul expressed confidence that once the dispute is resolved, the audience would see that 1MDB’s money had not gone missing and was all accounted for.

As for the US$1.5 billion that the DOJ alleged had been diverted from 1MDB Global Investment Ltd, he said the money was invested in BSI Bank and was still in 1MDB’s balance sheets.

This was despite the bank closure by Swiss and Singapore authorities he said, because the bank was merely acting as a ‘relationship manager’ for a fund manager – a relationship that he compared to an ordinary Malaysian buying Amanah Saham shares through a local bank, although it was managed by Amanah Saham Nasional Berhad.

“As far as 1MDB is aware, the US$1.5 billion is still there. We will wait and see what the DOJ finds. If it is indeed misappropriated, we can take action.”

He also cautioned students that the DOJ lawsuits were mere allegations at this point, without evidence or even a hearing.

“Therefore what is written in the lawsuit is not necessarily the truth or fact, until a court has adjudicated it.”

He also said US attorney-general Loretta Lynch’s behaviour was unusual, in holding a major press conference together with a line-up of DOJ’s top guns just to announce a civil forfeiture suit.

He pointed out that Swiss and Singapore authorities had taken much sterner action against those allegedly involved in the 1MDB scandal with less fanfare.

In addition, he said the DOJ never approached 1MDB - the alleged victim of the misappropriation - nor their Malaysian counterparts that had investigated the matter.

Booklet on 1MDB 'slanderous'

He said this after one student took issue with a booklet distributed by the townhall session’s organiser, the Department of Special Affairs, titled ‘Saman DOJ Meragukan’ (The suspicious DOJ lawsuit).

During the question-and-answer session, the student read out an excerpt from the booklet claiming that Lynch was vying for attention in hopes of being appointed by the next US president.

“To me, this is slander,” one student said while demanding for proof.

Another student compared reading the booklet to “reading a tabloid”, saying it lacked citations that a student would have to diligently include in his thesis.

In response, the event’s host Tun Faisal Ismail Aziz said the booklet was merely a compilation of questions and answers.

In addition, he said the excerpt in the booklet in question was qualified by the phrase ‘Terdapat beberapa pandangan…’ (There are several opinions…), and what followed was a summary of those views.

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