KUALA LUMPUR: In the High Court today, former 1MDB CEO Arul Kanda Kandasamy admitted that he took no action to counter negative reports from local and international media regarding the company’s financial controversies.
He was responding during cross-examination by 1MDB’s counsel, Datuk Lim Chee Wee, regarding the alleged transfer of USD700 million to Good Star Limited, a company owned by fugitive businessman Low Taek Jho, better known as Jho Low.
Arul Kanda was testifying as the first defendant during the hearing of the USD6.59 billion lawsuit filed by 1MDB against him and former board chairman Tan Sri Mohd Irwan Serigar Abdullah, for breach of trust and conspiracy.
Lim then referred him to four reports published between February and April 2015, by the Sarawak Report, The Edge, the South China Morning Post, and Euromoney.
Lim: You would have learned from The Edge article that USD700 million of 1MDB funds went to Good Star Ltd., a company that was owned by Jho Low.
Arul Kanda: Yes, I was aware of the allegations.
Lim: Armed with knowledge of this USD700 million paid to Good Star Ltd, you did not instruct any lawyers or forensic accountants to investigate this?
Arul Kanda: Yes.
Lim: Neither did you lodge a police report.
Arul Kanda: Yes.
Lim: Neither did you contact The Edge to ask for details of the investigation.
Arul Kanda: Yes.
Earlier in the trial, Arul Kanda testified that he was aware of damaging articles and statements about 1MDB before joining the company on Jan 15, 2015.
He specifically mentioned reports by former Damansara MP Tony Pua Kiam Wee and current Economy Minister Datuk Seri Rafizi Ramli, but could not recall the specific details.
In May 2021, 1MDB filed a lawsuit against the two individuals, accusing them of breach of trust and conspiracy, which led to losses of USD1.83 billion, linked to the company’s investment in 1MDB-Petrosaudi Ltd, which was subsequently converted into the Brazen Sky Limited investment, purportedly recoverable from the Bridge Global Fund.
1MDB also alleged that both defendants committed breach of trust and conspiracy by misappropriating USD3.5 billion in company funds paid to Aabar Investments and USD1.265 billion paid to International Petroleum Investment Company on May 9, 2017.
1MDB further alleged that Mohd Irwan conspired with Arul Kanda to extend his employment agreement, resulting in a payment of RM2,905,200 to Arul Kanda, all while disregarding the company’s interests, which ultimately led to financial losses and damages.
Consequently, 1MDB is seeking USD6.59 billion in damages from both defendants and an additional RM2.9 million from Mohd Irwan related to the extension of the employment agreement.
The hearing before Judge Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan will resume on Feb 3.
