MoF instructed to recover RM2.5m paid to Arul Kanda and other claims on cost of decisions made by him
By P PREM KUMAR & DASHVEENJIT KAUR / Pic By BLOOMBERG
The government will initiate legal proceeding against former president and CEO of 1Malaysia Development Bhd (1MDB), Arul Kanda Kandasamy (picture), to recover RM2.5 million paid to the latter as remuneration.
Finance Minister Lim Guan Eng said the ministry has been instructed to initiate legal proceeding against Arul Kanda to recoup the amount given by the previous administration as half of an ex-gratia payment for his services from January-June 2018.
The legal proceeding is also to claim all other costs incurred by Arul Kanda or his decision throughout his leadership of debt-ridden state fund 1MDB.
“The Ministry of Finance (MoF) has been instructed to recover RM2.5 million paid to Arul Kanda and other claims on cost of decisions made by Arul Kanda,” Lim told a press conference at the Parliament lobby yesterday.
Lim said a legal firm has been appointed for that purpose and will be making the claims to Arul in the near-term.
Arul Kanda was supposed to be paid another RM2.5 million in June 2018. However, a change in federal government had stopped the proposed payout.
Lim questioned the rationale behind the high salary or ex-gratia promised to Arul Kanda while the latter was on “garden leave” since the beginning of this year.
Arul Kanda was the sole 1MDB employee after the company was absorbed as a unit under the MoF by the previous Barisan Nasional government.
Lim also refuted claims by former Prime Minister (PM) Datuk Seri Mohd Najib Razak that Arul Kanda should be thanked and deserved the high salary because he took a pay cut to join 1MDB.
“How can Arul be given RM5 million as salary for six months only? On top of that, he was given garden leave.
“He was even being paid more than the PM then (Najib),” Lim said. Najib was the chairman of 1MDB’s infamous board of advisors.
Lim also said the MoF has no record made available to justify that Arul Kanda took a pay cut from his previous occupation to lead 1MDB.
“I have no record which states that he was paid RM5 million for six months and up to RM10 million for a year of service.
“Is the former PM (Najib) trying to mislead to defend the high salary package given to Arul Kanda?” Lim said.
Arul Kanda was appointed as 1MDB president and CEO to replace Mohd Hazem Abdul Rahman who resigned in January 2015.
On June 28, 2018, two days before the end of his employment contract, Arul Kanda was sacked from 1MDB on grounds of dereliction of duties.
His contract was initially supposed to end in December 2017, but was given another six-month extension in January 2018. During the tenure, he was promised RM5 million in salary for the six-month period by the previous government — the first payment in January 2018, while the second was supposed to be paid on June 30.
Prior to 1MDB, Arul Kanda served as an executive VP and head of investment banking at Abu Dhabi Commercial Bank PJSC since he joined the bank in July 2008.
On the local front, Arul Kanda served as a non-independent non-ED of RHB Investment Bank Bhd from July 2009 to May 2011, while serving in a similar capacity at RHB Capital Bhd and RHB Islamic Bank Bhd.