Former Maika Holdings Bhd CEO S Vell Paari claimed that funds channelled from the company to him, were actually refunds for money he had pumped to help the firm stay afloat.
Vell Paari, who is also MIC secretary-general, said when he was appointed CEO in 2009, Maika was already financially distressed.
"I then funded Maika from time to time to enable it to meet its financial obligations. When Maika had the funds, they would refund me the monies (I had) advanced.
"As a matter of fact, at the time Maika was wound up, the company was still indebted to me for a large sum of monies advanced to them and for my unpaid salaries," he said in a statement today.
Sarawak Report previously alleged that millions in ringgit had been channelled to companies linked to Vell Paari.
According to Sarawak Report, documents sighted indicated that among the payments made included 20 cash transactions totalling RM1.6 million made out by Maika to Vell Paari without detailed explanations other than that they were “promotional finder fees”.
On top of this, the Sarawak Report article alleged a further A$145,301 (currently RM422,100) and A$725,000 (currently RM2.1 million) were paid to OKA Motors in 2002 for an alleged termination of a contract and for procurement of advanced software, respectively.
Further alleged payments include a purported Bank Negara-approved transfer of US$3.12 million (RM11 million) to another Vell Paari-linked entity in South Africa, Reumech OMC.
Sarawak Report claimed that these payments did not obtain the approvals of the Maika board of directors.
However, Vell Paari said the payments to OKA Motors and Reumech OMC were approved by the board.
"I wish to state that the monies were paid pursuant to an investment arrangement by Maika which was approved by both - the board of directors as well as the members of Maika at the annual general meeting.
"To the best of my knowledge, these investment arrangements were terminated and payments were refunded to Maika," he said.
Meanwhile, Vell Paari claimed prior to the Sarawak Report article being published, an individual had tried to blackmail him, demanding RM3.5 million in exchange for ensuring "the subject matter of the article could be resolved".
He said he refused to entertain the offer, which led to the article being published.
Vell Paari added that he would decline further comment on the allegations, which he described as "a frivolous attack".
Maika Holdings was the brainchild of S Samy Vellu, Vell Paari’s father, who is also a former MIC president and a close Umno ally.
The investment arm was set up in the early 1980s, raising over RM100 million in investment from Indian Malaysians, mostly among the middle- and lower-income groups.
However, alleged mismanagement led to heavy losses with investors barely making a return, with many suffering losses.