ARUL Kanda Kandasamy will continue as 1Malaysia Development Berhad (1MDB) president and chief executive indefinitely as the scandal-hit state investment fund unwinds all its assets, sources told The Malaysian Insight.
He was due to end his tenure this December 31 after his appointment in January 2015 to turn around the state investor that was shaken with allegations of money laundering by the United States Department of Justice (DoJ) and authorities in Singapore and Switzerland.
It is understood that Putrajaya made the decision to keep Arul Kanda in the 1MDB top job to ensure smooth operations ahead of the next general election due by August 2018.
Before taking up the 1MDB job, Arul Kanda served as executive vice-president and investment chief for Abu Dhabi Commercial Bank PJSC, which he joined in 2008. He was previously at Barclays Capital and Credit Agricole.
He also served as a non-independent non-executive director in various companies in the RHB Capital Berhad banking group from July 2009 to May 10, 2011. He is a UK-qualified lawyer.
The suave banker who cut his teeth in London and Dubai was previously tipped to be in the running to succeed Azman Mokhtar as managing director of sovereign wealth fund Khazanah Nasional Berhad.
The Royal Military College (RMC) graduate was said to have the backing of the country’s economic ministers and top Umno officials to be the Khazanah deputy managing director but the wealth fund decided recently to appoint two officials from within the organisation for the deputy jobs.
Prime Minister and Finance Minister Najib Razak is Khazanah chairman and was once chairman of the 1MDB advisory board until Treasury secretary-general Irwan Serigar Abdullah took over recently.
Irwan has been running 1MDB’s operations after the Ministry of Finance (MoF) took over the state investor’s assets, which have been slowly sold off to pay its debts that once peaked at RM42 billion.
1MDB is due to pay off a final tranche of US$602.73 million to Abu Dhabi’s state investor International Petroleum Investment Company (IPIC) by December 31 to complete a US$1.205 billion payment deal reached last April.
While Putrajaya has maintained that no money was lost in the 1MDB scandal, the US attorney-general said two weeks ago it has “restrained” some US$3.5 billion (RM14.1 billion) worth of assets from the national investment fund.
“For example, nearly half of the US$3.5 billion in corruption proceeds we have restrained is related to just one enforcement action.
“That action was related to Malaysian sovereign wealth fund known as 1MDB. 1MDB was created by the Malaysian government to promote long-term economic development for the benefit of the Malaysian people,” said US attorney-general Jeff Sessions at the Global Forum on Asset Recovery on December 4.
Sessions dubbed the 1MDB scandal as “kleptocracy at its worst” and said more than US$4.5 billion has been laundered via a complex web of transactions from shell companies ranging from Switzerland and Singapore to Luxembourg and the US.
“But allegedly corrupt officials and their associates reportedly used the funds for a lavish spending spree: US$200 million for real estate in Southern California and New York; US$130 million in artworks; and US$100 million in an American music label, not to mention a US$265 million yacht.”