The stage is set for a live television debate between the chief of state investor 1Malaysia Development Berhad (1MDB) and a fierce critic from an opposition party, after the former agreed to the challenge - without any condition - of being questioned on the business dealings of the debt-ridden firm.
Mr Arul Kanda Kandasamy, who took over as president of 1MDB in January, said at a press conference yesterday that he was withdrawing his demand that Democratic Action Party (DAP) lawmaker Tony Pua resign from the Public Accounts Committee to avoid conflict of interest.
The Parliament's bipartisan panel is tasked with probing the books of 1MDB.
"I will meet... Tony Pua for a live discussion, or talk show, or debate, without any condition," Mr Arul said. In response, the DAP publicity chief said: "I accept (the challenge). We can do it any time."
The debate will take place on state-owned broadcaster RTM, which Mr Arul said Communications and Multimedia Minister Salleh Said Keruak had agreed to. It is not known when the debate will take place.
BRING ON THE CHALLENGE
I will meet... Tony Pua for a live discussion, or talk show, or debate, without any condition.
MR ARUL KANDA KANDASAMY, chief of state investor 1MDB
READY ANY TIME
I accept (the challenge). We can do it any time.
MR TONY PUA, a Democratic Action Party lawmaker, who has been accusing 1MDB of financial misappropriation since 2010
Mr Pua has been accusing 1MDB of financial misappropriation since 2010. In just five years of operations, the firm - whose advisory board chief is Prime Minister Najib Razak - recorded RM42 billion (S$13.7 billion) in debt.
It has struggled to meet obligations arising from its liabilities, leading to a rationalisation plan being undertaken in June to pare down the debt through asset sales.
At the press conference, Mr Arul explained 1MDB's plan to settle the debt burden, which had sparked calls from across the political divide for Datuk Seri Najib to resign.
Besides a debt-for-asset swap with Abu Dhabi's sovereign wealth fund - International Petroleum Investment Company - worth RM16 billion that was agreed to five months ago, 1MDB is finalising a sale of its energy division for between RM16 billion and RM18 billion, and a 60 per cent stake in a 197ha development called Bandar Malaysia (BM). It is situated on a former airbase 4km south of the Petronas Twin Towers.
Mr Arul said that with an indicative value of RM500 per sq ft, BM should be worth at least RM11.5 billion, bringing the value of debt reduction close to RM42 billion. 1MDB will be left with other assets, such as the 30ha Tun Razak Exchange (TRX) financial hub in the city centre.
But critics have often pointed to the low prices at which land for BM and TRX were sold by the government to 1MDB, which spent RM400 million and RM200 million to acquire the respective plots.
When asked if the resale of BM - which is set to receive three final bids this week - to the open market would plug losses from 1MDB's Edra Global energy arm, Mr Arul said only that "the level of debt is not sustainable". He added: "Now we have to give up the assets in order to pay down the debt."
Beginning in 2012, 1MDB had raised RM18 billion to buy three companies with a total generating capacity of 5,500MW from 13 power plants. Analysts had considered the valuations to be expensive.
Mr Arul admitted paying a premium, but said "the sum of the parts is greater" because of efficiencies of scale and the ability to bid for new power projects at lower tariffs.
But although 1MDB had won a tender for a 2,000MW plant in March last year, it was unable to begin work and handed the award to state utilities firm Tenaga Nasional earlier this year, resulting in a higher tariff.