Arul Kanda took a big pay cut to join 1MDB

This article first appeared in The Edge Financial Daily, on August 2, 2018.
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KUALA LUMPUR: Former prime minister Datuk Seri Najib Razak said Arul Kanda Kandasamy, the former chief of troubled 1Malaysia Development Bhd (1MDB), took a “big pay cut” to join the cash-strapped state investment fund.

His statement came after Finance Minister Lim Guan Eng revealed yesterday that Arul Kanda was offered RM5 million as salary for six months from January to June this year, of which half of that or RM2.5 million had been paid to him.

“You must see it in the context that whatever [was] paid to him is much smaller than what he was [previously] earning,” Najib told reporters at the Parliament lobby yesterday.

“He has successfully reduced the [1MDB] debt from RM50 billion to RM30 billion, so he has accomplished that, [and that is] part of his responsibilities,” said Najib.

He added that a lawyer “from somebody close” to Arul Kanda will be issuing a statement on this matter.

Arul Kanda first joined 1MDB in January 2015 as its president and chief executive officer to turn around the debt-laden state investment fund.

Prior to joining 1MDB, he was executive vice-president, head of investment banking group and head of corporate finance at Abu Dhabi Commercial Bank PJSC, a post he held from July 2008.

Separately, to a question about the claim made by Defence Minister Mohamad Sabu that there are 28 fighter jets but only four are working, Najib said: “I don’t know the latest figures. So, I’m not prepared to say something which I don’t have facts [on].”

Mohamad Sabu was reported on Tuesday as saying the Royal Malaysian Air Force (RMAF) has 18 Russian-made Sukhoi Su-30MKM and 10 MiG-29 jetfighters, but only four of the Sukhois can take to the skies. The remainder 14 fighter jets are under repair.

He said the RMAF is unable to properly maintain the fighter jets’ airworthiness, and that the defence ministry had terminated the contractor engaged by the former administration and was looking at local contractors as a replacement.