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Thursday, January 15, 2015

1MDB & new CEO - ARE THEY LYING? From 'it'll take a while' to suddenly 'it has fully redeemed' Cayman funds, Tony calls for details

1MDB & new CEO - ARE THEY LYING? From 'it'll take a while' to suddenly 'it has fully redeemed' Cayman funds, Tony calls for details
We welcome the new 1Malaysia Development Bhd (1MDB) CEO, Arul Kandasamy’s more open approach but he will do himself great injustice if he doesn’t wipe the slate clean and increase transparency to rescue and rebuild the troubled company
After increased pressure over the past week over the balance of US$1.23 billion investment funds in Cayman Islands, the new CEO of 1MDB, Arul Kandasamy suddenly announced on 13 January 2015 that “1MDB can confirm that it has now redeemed in full the US$2.318 billion invested by the company in a Cayman Islands registered fund.”
The announcement was made suddenly as he had just explained the delay the media that “with investments of this size and nature – it takes a while to wrap them up.” This was following the 1MDB Chairman, Tan Sri Lodin Wok Kamaruddin’s statement that the company only “expects to redeem the remaining amount in the coming months”.
1MDB was under pressure because they had promised the auditors, Deloitte Malayisa, the above amount will be “received before the end of November 2014, as advised by the investment manager” which had raised the question if the auditors have been misled.
However, while we welcome the statement that the funds have been finally “redeemed”, it had been short on details which left the media and the public a little unclear of what was meant by “redeemed”.
Kinibiz.com for example had sharply noted that “the statement however does not specify where the money is currently being held.”
Arul Kandasamy
It will certainly raise the public’s confidence in 1MDB if the new CEO could be more specific if by “redeemed”, he meant that the proceeds from the disposal of the investment in Cayman Islands have already been “received” by 1MDB. Arul should also confirm the actual amount received in cash by the company. Such disclosure will certainly go a long way towards lifting the secrecy veil over the various mysterious actions of the company over the past 5 years.
Similarly, the new CEO should start his ‘reign’ on a clean slate instead of continuing to justify or hide the wrongs of the past which were not due to him.
In his exclusive interview with The Edge published this week, Arul failed to reply key questions convincingly on the mess that 1MDB is in.
When asked if 1MDB is unable to repay its loans, Arul only offered a flat denial. He said “You just made a whole series of assumptions, assumptions that 1MDB can’t pay. That is not the case… I’m tellying you your assumption is incorrect.”
However when given the opportunity to “clarify [1MDB’s] liquidity position”, he could only lamely respond that “on the specific numbers, I don’t have the accounts with me”.
When asked about the options granted to Abu Dhabi’s investment arm, Aabar, again the details were missing as “the price is in the accounts. I don’t have it right now.”
When asked by The Edge, “Can you at least comment on the power assets, the pricing at which 1MDB bought them?” The response was “this all happened before my time. I am not privy to the rationale” before making another meek attempt to justify the purchase without any specific numbers.
We certainly welcome the greater openness displayed by Arul in entertaining questions and criticisms from the public and the media. This is a refreshing change from the previous two Chief Executive Officers who hardly responded to anything during their time in office.
However it is important also not to muddy the truth without the necessary facts and figures. It is even more important that he refrain from sweeping criticisms under the carpet by accusing “certain individuals” making allegations directed at the company had been driven more by “political rather than genuine business considerations”.
Arul is not hired to play politics but to put 1MDB back in shape. If critics like myself get our facts and figures wrong, feel free to shame us with the right facts and figures. Let these facts and figures speak for themselves instead of attempting to taint the critics. Unless of course, the criticisms have hit the mark and there is no other way for 1MDB to respond without incriminating itself or the Government, which leaves the CEO with no recourse but to accuse 1MDB’s critics as making purely allegations of a political nature.
Tony Pua is MP for PJ Utara

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