Arul Kanda Kandasamy said his removal as Bandar Malaysia Sdn Bhd chairperson and TRX City Sdn Bhd director was to be expected since both companies now have new owners.
He explained that his appointment to the board of both companies were due to 1MDB’s former stake.
Arul Kanda, who is 1MDB president, explained that the two companies were transferred from 1MDB to Minister of Finance Inc (MOF Inc) with effect from March 31, 2017.
“It is only reasonable to expect that MOF Inc will seek to appoint new directors, per its discretion.
“As a professional manager, I serve as required by the shareholder. I will always be guided by and will accordingly accept any decisions made by the shareholder,” said Arul Kanda.
However, he said that he had not received any official notification on his removal and could not comment on speculations arising from it.
Speculations were raised by The Malaysian Insight, which alleged that Arul Kanda’s removal was due to “potential conflicts of interest” following the botched Bandar Malaysia deal with the Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC) consortium.
Victim of botched Bandar Malaysia deal?
The report claimed that the decision was made by Prime Minister Najib Abdul Razak in his capacity as finance minister and Treasury secretary-general Irwan Siregar Abdullah, who helms the 1MDB board.
There are conflicting accounts on why the Bandar Malaysia deal fell apart.
According to TRX City Sdn Bhd – the landowners of Bandar Malaysia – the deal could not proceed because IWH-CREC had lapsed on payments 10 times.
However, the consortium has disputed this and stressed that all payment obligations had been fulfilled.
A lavish event was supposed to mark Bandar Malaysia’s next stage of development was to have taken place last Wednesday, however it was canceled at the eleventh hour.
The consortium had signed a memorandum of understanding in December 2015 to acquire a 60 percent stake in the 486 acres of prime land in Sungai Besi for RM7.41 billion.
The real estate is seen as an important component of Kuala Lumpur’s development, as it will host the terminal of the Kuala Lumpur-Singapore High Speed Rail as well as future MRT stations.