Malaysia's Finance Ministry to sue ex-1MDB CEO Arul Kanda for S$838,000 salary advance

It was reported that former 1MDB chief executive officer Arul Kanda Kandasamy's salary package amounted to RM5 million for the period between January and June this year. PHOTO: REUTERS

KUALA LUMPUR (THE STAR/ASIA NEWS NETWORK) - Malaysia's Finance Ministry will take legal action against former 1Malaysia Development Berhad (1MDB) chief executive officer Arul Kanda Kandasamy to recover RM2.5 million (S$838,000) in salary that was paid to him in advance.

It was reported that Mr Arul's salary package amounted to RM5 million for the period between January and June this year, and that then Treasury secretary-general Irwan Serigar Abdullah and former prime minister Najib Razak had signed off on the amount.

Half of that amount was paid to Mr Arul, with the remaining RM2.5 million meant to be paid after June 30. The Finance Ministry has refused to pay the remaining RM2.5 million to Mr Arul, who had his services terminated on June 28 for dereliction of duties.

Finance Minister Lim Guan Eng told reporters in the Parliament lobby on Thursday (Aug 2) that the government would seek to reclaim the RM2.5 million paid and that the Attorney-General had been advised on the matter.

"We have instructed to claim back the RM2.5 million," Mr Lim said, adding that a law firm has been appointed to make the claims.

Mr Lim had earlier questioned Mr Arul's generous remuneration as CEO of the troubled state fund.

Najib had defended the payment, saying Mr Arul was earning much more at a bank in the United Arab Emirates, and took a pay cut when he joined 1MDB in January 2015.

Mr Lim said his ministry had no record showing Mr Arul earned so much previously.

"We have no such records showing he was earning RM10 million a year. We all know where he worked before, and even that (company's) CEO does not earn such numbers in a year," Mr Lim said on Thursday.

Join ST's Telegram channel and get the latest breaking news delivered to you.