This article first appeared in The Edge Malaysia Weekly, on January 11 - 17, 2016.

THE Edge: Why is the prime minister the chairman of 1MDB’s advisory board?

Arul Kanda Kandasamy: What happened initially, was that TIA (Terengganu Investment Authority) was owned by MB Inc Terengganu. At that time, there was a board of advisors. The federal government then agreed to guarantee the sukuk. The original RM5 billion sukuk was for TIA when it was owned by MB Inc Trengganu. At that time, Tengku Mizan, the Agong (and Sultan of Trengganu), was the chairman of the board of advisors.

But when the federal government took over, that was when Article 117 got inserted (into 1MDB’s Articles of Memorandum) — that the federal government has the right to determine certain things that impact the guarantee.

And in order to do that, you need someone on the same level as Tengku Mizan. Who else but the prime minister? That’s how it started.

When the federal government took over, that structure was there and it was not changed. But from a company law perspective, the chairman of the board of advisors has zero impact on the company.

We have never obtained any permission under 117. We have only always followed the normal Companies Act procedure. We have never invoked 117 for any procedure.

The issue arose when MoF Inc also appointed the prime minister as the Finance Minister shareholder representative. That is where the confusion arose. Under normal company law, board resolutions need shareholder approval. And he signed as the shareholder representative. And that was then spun, when in fact, the chairman of the board of advisors has no legal say.

Because of 1MDB, the prime minister has been criticised. Can you comment?

Firstly I am not a politician and I cannot speak on behalf of the government. As I said, 1MDB is a business issue that has been politicised. Any objective observer looking at this will come to the same conclusion.

I feel sorry for the opposition or those who are not aligned with the government, because frankly, there are not that many issues to attack the government with. If you look at policies, at general economic growth, if you look at many other metrics, Malaysia stands head and shoulders above many other countries.

In fact, that is one of the main reasons I came back to the country.

From the outside, comparing it objectively, for the size of the country, for the population size, the fact that we have a non-homogenous population, what we have achieved is quite amazing.

Therefore they are left with these issues to raise.

What made it particularly bad in the case of 1MDB is not Tony Pua or Rafizi (Ramli) in their incessant statements. Because frankly, I think the nature of their arguments are discounted by 1MDB. And it is expected to a certain extent.

What caused an issue was when Tun Dr Mahathir Mohamad, and later Tan Sri Muhyddin Yassin, added their voices to the fray. Because they were formerly aligned to the ruling party, that caused anger and concern and disappointment.

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