Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily, on April 28, 2016.

 

KUALA LUMPUR: Troubled strategic investment fund 1Malaysia Development Bhd’s (1MDB) president and group executive director Arul Kanda Kandasamy said in a statement yesterday that he “had never admitted there was fraud” in relation to 1MDB.

“I refer to various [commentaries] on my recent statements regarding the possibility of fraud in relation to 1MDB. In particular, I must clarify that I had never ‘admitted there was fraud’ as has been mistakenly alleged by various personalities and subsequently wrongly reported by certain media.

“What I did say is that, given the content of the April 12, 2016 statement by the Office of the Attorney General of Switzerland, 1MDB must now be open to the possibility of fraud, i e that it cannot be discounted. It is regrettable that various personalities have chosen to ‘spin’ my words to further their own agendas,” he added.

To him, what is more important is 1MDB’s firm contention on the US$3.5 billion deposits paid to the British Virgin Islands-incorporated Aabar Investments PJS Ltd (Aabar BVI), which has an almost identical name to Abu Dhabi sovereign wealth fund International Petroleum Investment Co’s (IPIC) subsidiary — Aabar Investments PJS.

“1MDB maintains that it dealt with senior executives, hence these transactions bind IPIC and Aabar PJS as corporates — bluntly put, it is an internal matter for them to resolve,” he stressed.

“1MDB will not shy away and looks forward to resolving this dispute with IPIC through discussion and, if necessary, arbitration, in order to ensure an expeditious resolution in the interest of all stakeholders,” he added.

Meanwhile, he said the fund will continue to fully cooperate with the Royal Malaysia Police to facilitate the ongoing investigations into the company, adding that if any evidence of wrongdoing arises, lawful action shall be taken.

In an exclusive interview with The Edge weekly published on Saturday, he told the weekly: “What we cannot discount is there could actually be fraud, it could actually be a massive fraud that Khadem Al Qubaisi and Mohamed Badawy Al Husseiny did without anyone else knowing, and maybe there was collaboration [in the fraud] from our side. We have to be open to that fact.”

According to him, Khadem was the managing director of IPIC and chairman of Aabar, while Mohamed Badawy was the chief executive officer of Aabar at the time.

Yesterday, 1MDB announced it had defaulted on the US$50.3 million (RM196.67 million) interest payment due for its US$1.75 billion bonds issued by its unit 1MDB Energy (Langat) Ltd, triggering a cross default on a RM5 billion sukuk due in 2039, as well as the RM2.4 billion Bandar Malaysia Sdn Bhd sukuk due between 2021 and 2025.

The default came after it had a falling out with IPIC, after the latter claimed that it did not receive any money as a form of indemnity to guarantee a US$3.5 billion bonds issued by 1MDB. However, 1MDB said it had transferred US$3.5 billion to Aabar BVI, a company that IPIC recently clarified was not its subsidiary.

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