Arul Kanda’s role in loan to 1MDB queried
(FMT) – Petaling Jaya Utara MP Tony Pua has demanded that 1MDB chief Arul Kanda Kandasamy should confirm if he was involved in the USD975 million loan to the company from a consortium while he worked in the Abu Dhabi Commercial Bank (ADCB).
As highlighted by The Edge Financial Daily on Thursday, Arul Kanda was working in ADCB when the banking consortium granted the loan on 1 September 2014, noted Pua who is also DAP National Publicity Secretary.
He further noted that ADCB was one of the Deutsche Bank-led consortium lenders for the loan which, according to the Singapore Business Times, will be recalled nearly four months early by the jittery banks as the market panics. 1Malaysia Development Berhad (1MDB) is a wholly-Ministry of Finance owned company touted as a strategic investment arm.
In addition, added Pua, The Edge reported two months ago that the proceeds of the said loan substantially went towards buying back options deposited with ADCB’s sister company, Aabar Investments Limited, to acquire 1MDB’s power assets.
The 1MDB March 2014 financial report stated that the company had “agreed to compensate (Aabar) at a consideration agreed under the terms and conditions” of a 22 May 2014 settlement agreement which was never disclosed.
The options were initially granted to Aabar as part of the terms for Aabar’s parent, International Petroleum Investment Corporation (IPIC), to provide a guarantee for two 1MDB bond issues amounting to USD3.5 billion (RM12.6bn).
Again, stressed Pua, this begs the question whether Arul was involved in putting together the loan to 1MDB and whether he was involved in the dealings of IPIC and Aabar when he was working in Abu Dhabi. “Given the fact that ADCB, IPIC and Aabar are all owned by the Abu Dhabi government, it makes Arul’s role as 1MDB president even more delicate and subject to scrutiny for possible conflict of interest.”