Former prime minister Najib Abdul Razak’s praise for former 1MDB CEO Arul Kanda Kandasamy and attempts to justify an RM5 million bonus for the latter have been met with ridicule online.
But no one was more acerbic than Damansara MP Tony Pua, who today listed down some of Arul Kanda’s questionable decisions.
In a sarcasm-laden statement, Pua urged Malaysians to ask what “magnificent” Arul Kanda had done to reduce 1MDB’s RM50 billion debt to RM30 billion - a measure which Najib had cited as justification for the bonus.
“The first thing Arul Kanda did was to dispose of 1MDB’s only profit-making asset, its power plants, for RM9.83 billion, ‘successfully’ paring down 1MDB’s debt by an equivalent amount.
“However, as highlighted many times - 1MDB’s energy business was originally acquired for RM12.1 billion, which meant that the sale crystallised a loss of RM2.27 billion for 1MDB.
“It certainly took a genius like Arul Kanda to come up with a plan to sell the company’s prized asset at a loss,” said Pua.
He said Arul’s next “fantastic idea” was to transfer ownership of Tun Razak Exchange and Bandar Malaysia - two 1MDB subsidiaries - to the Finance Ministry two years ago.
This was done under the pretext of following advice from the Parliament’s Public Accounts Committee, but Pua accused Arul Kanda of hiding key facts about how the debts incurred by 1MDB were ultimately transferred to taxpayers.
“What Arul Kanda didn’t have the cheek to admit was that he didn’t just transfer the Tun Razak Exchange and Bandar Malaysia properties to MOF (Finance Ministry), they came attached with an RM2.4 billion sukuk bond and an RM800 million loan from Socso.
“Very cleverly, Arul Kanda successfully reduced 1MDB’s debt by another RM3.2 billion,” he said.
However, Arul Kanda’s “masterstroke”, according to Pua, was his repeated claims that 1MDB had been successful in servicing its debts.
“In reality, it was the MOF which was forced to secretly finance these payments,” said Pua.
Since the Pakatan Harapan administration was formed, it has been established that the Najib administration had quietly bailed out 1MDB to the tune of RM7 billion in a year.
It has been established that funds from Bank Negara and Khazanah Nasional were used for the bailout.
"The people shall be the judge if Najib’s emphatic defence of maestro Arul Kanda can withstand the test," Pua concluded.
In early June, Malaysiakini had established that Arul Kanda was promised RM5 million in ex-gratia payment to be paid in two instalments by Najib in his capacity as finance minister and Arul Kanda’s boss.
Arul Kanda has already been paid the first instalment but could no longer claim the second because he was terminated two days before the end of his tenure by the new administration.
Najib finally addressed the matter publicly yesterday, arguing that the bonus was justified because Arul Kanda had succeeded in bringing down 1MDB’s debt from RM50 billion to RM30 billion.
The former prime minister also said Arul Kanda took a pay cut in order to assist 1MDB’s debt restructuring exercise.