Trapped beneath a mountain of debts and a litany of allegations, government-owned investment fund 1Malaysia Development Berhad (1MDB) appears to be in dire need of rescue.
And the financial entity, which is the brainchild of Prime Minister Najib Abdul Razak, is hoping that 39-year-old banker Arul Kanda Kandasamy would be its knight in shining armour.
And in an email communique to Malaysiakini, 1MDB’s newly-minted president and group executive director expressed confidence in steering the company out of the woods.
“I would not have taken the job if I wasn’t [confident],” he said despite detractors claiming that his sterling credentials would not be able to turn around the company’s image or revive its financial standing.
Though aware that what lies before him is an uphill task, Arul, however, is far from unnerved.
“I have come into this role with my eyes wide open,” he said. “I recognise there are a number of challenges that would need to be addressed, and the strategic review is the first step in that process.
“Any company, be it an international conglomerate or a small corner store, has challenges that it would have to face from time to time. The same is true of 1MDB.
“...But I am confident that we would be able to overcome these and realise the full value of the excellent assets within the business,” he explained.
Arul also pointed out 1MDB has a solid foundation which can be built on.
“We have excellent assets, exciting projects in the pipeline, and an excellent group of people working within the various businesses.
“I think these factors, combined with my own experience, should allow us to drive the business forward,” he said.
Due diligence
As for the allegations regarding 1MDB, Arul said that having worked in the banking sector for a long time, he takes due diligence seriously.
“As such, when considering whether to take on this role, I examined every slew of information I could find about 1MDB, be it the company’s previous annual reports or articles carried by the media.
“I also held in-depth discussions with the board about some of the issues that have been raised by outside parties. They were very frank and transparent with me.
“I genuinely believe that the majority of the allegations that have been directed at the company have more to do with a misunderstanding of the business, or are raised for purposes that aren’t necessarily business related, as compared to any real issues that exist within 1MDB,” he added.
Despite critics claiming that his plans would be frustrated by poor decisions made in the past, Arul believes that 1MDB’s fortunes could still be reversed.
“Whilst I can’t speak about anything that may have happened in the past, I have confidence that I would have the full support of the board and our shareholders to lead the business and steer it in the direction that would allow us to generate maximum value,” he stressed.
Strategic review
Quizzed on his immediate plans for 1MDB, Arul said his topmost priority would be to meet the rest of the team in the company which has a wide range of investments from energy, real estate, tourism to agribusiness.
“Every company is only as good as the people that make it, and we are fortunate to have an excellent group of people across all levels, from the experienced management teams at the various business divisions or the power plant operator in Jimah.
“I want to take the time to listen to their views on the company, and understand their aspirations as well as any concerns they may have.
“At the same time, we have announced that a strategic review of the business would be carried out,” he added.
Explaining the “strategic review” which he will be spearheading, Arul said that it would involve a thorough analytical examination of the business and operations.
This, he added, would allow him to understand how to address the challenges faced by 1MDB at present and develop a strategy to maximise value from the firm’s assets and projects.
Arul, who holds a Master's degree with distinction in corporate and commercial law from the University College London, served as an executive vice-president, head of investment banking group and head of corporate finance division in the Abu Dhabi Commercial Bank since July 2008.
Arul would be succeeding Mohd Hazem Abd Rahman, who has stepped down as managing director and chief executive officer.
In announcing the transition, 1MDB chairperson Lodin Wok Kamaruddin said: "Arul brings a wealth of experience from the financial world and a proven track record of transforming businesses.” - M'kini
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