MoF: Arul Kanda offered RM5 mil salary for six months' work

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KUALA LUMPUR (July 31): Arul Kanda Kandasamy, the former chief of troubled 1Malaysia Development Bhd (1MDB), was offered a RM5 million salary package for a six-month period from January to June this year. Half of that or RM2.5 million had been advanced to him, according to Finance Minister Lim Guan Eng.

"The contract to pay the remuneration was signed by none other than the former Finance Minister," Lim said in the Parliament today, referring to Datuk Seri Najib Razak. Lim's press officer, however, later clarified that the contract was signed off by former treasury secretary-general Tan Sri Irwan Serigar, while Najib approved it.

According to Lim, the balance RM2.5 million was supposed to be paid after June 30, 2018. "Luckily there was a change in government. Otherwise he would have pocketed the balance," he added.

Arul was the third president and chief executive officer of 1MDB, a brainchild of Najib that had racked up debts of about RM50 billion. 

On June 29, The Edge reported that 1MDB, which is wholly owned by the Minister of Finance Inc, sacked Arul Kanda two days before the end of his garden leave on June 30, on grounds of dereliction of duties.

In a related matter today, Lim also revealed that SRC International Sdn Bhd paid its directors, Datuk Suboh Md Yassin and Nik Faisal Ariff Kamil, fees amounting to RM84,583 and RM74,583, respectively.

What is interesting, Lim said was that "these fees were paid for [work in] a four-month period." In terms of annual salary, Lim said Nik Faisal was paid RM335,533, and a bonus of RM533,000.

Under Najib's watch, the previous Barisan Nasional administration established SRC International, a former 1MDB subsidiary, in early 2011 to pursue strategic overseas investments in energy resources.

Now under the Finance Ministry, SRC International is under pressure to meet interest payments on its borrowings of RM4.3 billion, which came primarily from the Retirement Fund Inc (KWAP).

It was reported that SRC International paid an annual interest of RM164 million to KWAP. This jumped to RM660 million in 2017 and RM964 million this year.