1MDB chief denies report he lied about flow of funds

President and Group Executive Director of 1MDB Arul Kanda Kandasamy.
President and Group Executive Director of 1MDB Arul Kanda Kandasamy. PHOTO: REUTERS

KUALA LUMPUR • The Sarawak Report news site, a thorn in the side of Prime Minister Najib Razak's administration, yesterday published minutes of a January board meeting of state investor 1Malaysia Development Berhad (1MDB), in which its chief Arul Kanda Kandasamy said millions of dollars in cash had been repatriated home. It apparently contradicted his other statements that the funds were parked in a Swiss bank in Singapore.

The Sarawak Report, run by London-based editor Clare Rewcastle Brown, claimed that Mr Arul had told "a barefaced and extended lie" about the existence of these funds in BSI Bank in Singapore.

Responding to the report, Mr Arul confirmed the authenticity of the meeting notes, but said there was a misunderstanding over how events had unfolded since. He said the January meeting was his first 1MDB board meeting after joining the state investor in the same month, and he had talked about the redemption based on his understanding of events that happened before he joined.

"Upon further investigation and verification, it became clear that this was a misunderstanding, which I then clarified to the board and our shareholder, the Ministry of Finance. This clarification is clearly recorded in subsequent board minutes and can be verified," he said.

The latest claim and counter-claim surrounding the debt-laden 1MDB came a day after the Malaysian central bank said it had recommended that the public prosecutor bring charges against 1MDB for inaccurate or incomplete disclosure of information about its investments of US$1.83 billion (S$2.55 billion).

The recommendation was made after the Attorney-General's Chambers said it found that Bank Negara's investigation had determined that 1MDB officials had not committed any crimes.

The constant stream of news about 1MDB led Cabinet minister Abdul Rahman Dahlan to lament that it is not being given space to breathe so it could resolve its debt problems.

"Everybody is not giving 1MDB a chance to be resolved. Everybody is making it difficult for 1MDB to do a turnaround or rationalisation," said the minister, who is also Barisan Nasional's strategic communications director.

A version of this article appeared in the print edition of The Sunday Times on October 11, 2015, with the headline '1MDB chief denies report he lied about flow of funds'. Print Edition | Subscribe