The Finance Minister Lim Guan Eng has revealed in Parliament on Tuesday that the former President of 1MDB, Arul Kanda was awarded a RM5 million contract for his continued employment from January to June 2018. RM2.5 million has been paid in January and the balance which was to be paid at the end of his contract has been withheld as his contract was terminated on 28 Jun 2018.
It should be noted Arul Kanda had himself admitted that he was on ‘garden leave’ for the entire period of his contract extension.
This contract was approved by the former Prime Minister, Dato’ Seri Najib Razak and signed by the former Treasurer General, Tan Sri Irwan Serigar. The question which begs to be asked is, why pay the purportedly brilliant Arul Kanda a whopping RM5 million contract and then place him immediately on “garden leave”?
Yesterday, Dato’ Seri Najib further defended that Arul had also done his job in managing the state fund’s debt. “He was successful in reducing the debt from RM50 billion to RM30 billion. So he has accomplished that which was part of his responsibility,” said Najib.
This is the first time the former Prime Minister has admitted that 1MDB had accumulated RM50 billion of debt as a result of the company’s excesses since its inception in 2009 by Dato’ Seri Najib himself.
The next question to ask is, how did this magnificent Arul Kanda reduce the RM50 billion debt to RM30 billion which justified the RM5 million sweetheart deal?
The first thing Arul Kanda did was to dispose of 1MDB’s only profit-making asset, its power plants for RM9.83 billion, ‘successfully’ paring down 1MDB’s debt by an equivalent amount. However, as highlighted many times – 1MDB’s energy business was originally acquired for RM12.1 billion, which meant that the sale crystalized a loss of RM2.27 billion for 1MDB.
It certainly took a genius like Arul Kanda to come up with a plan to sell the company’s prized asset at a loss.
The next fantastic idea from the former 1MDB President was to transfer the ownership of 1MDB’s real estate assets to the Ministry of Finance (MoF), under the pretext that it was advice from the Parliamentary Public Accounts Committee. However, what Arul Kanda didn’t have the cheek to admit was that, he didn’t just transfer the Tun Razak Exchange and Bandar Malaysia properties to MoF, they came attached with a RM2.4 billion sukuk bond and a RM800 million loan from SOCSO.
Very cleverly, Arul Kanda successfully reduced 1MDB’s debt by another RM3.2 billion.
Then the masterstroke from Arul Kanda must have been the ability to disingenuously announce that 1MDB has been successfully servicing and repaying approximately RM7 billion of its debts over the course of the past year, when in reality, it was MoF which was forced to secretly finance these payments.
However, the former Finance and Prime Minister, Dato’ Seri Najib Razak must have been so impressed by Arul Kanda’s dazzling performance in reducing 1MDB’s debt from RM50 billion to RM30 billion, that surely, the former 1MDB President deserves a golden parachute of RM5 million, an amount “much smaller than what he was earning before he joined 1MDB”.
The people shall be the judge if Dato’ Seri Najib Razak’s emphatic defense of maestro Arul Kanda can withstand the test.