Court Told PAC Did Not Blame Arul Kanda For 1MDB Mismanagement

KUALA LUMPUR, Sept 10 (Bernama) -- The High Court today was told the Public Accounts Committee (PAC) did not place the blame for the mismanagement of 1Malaysia Development Berhad (1MDB) on its former president and chief executive officer (CEO) Arul Kanda Kandasamy in 2016.

United Kingdom-based financial fraud investigator Richard Templeman admitted that he and PAC arrived at different conclusions regarding the 1MDB financial crisis, with him placing the blame on Arul Kanda, while PAC placed it on 1MDB's former chief executive officer, Datuk Shahrol Azral Ibrahim Halmi.

Templeman was responding to cross-examination by Arul Kanda's counsel, Sanjay Mohan in 1MDB's USD6.59 billion lawsuit against Arul Kanda and former treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah.

Sanjay: Mr Templeman, look at the PAC report and see what it says. Do you agree it is a very different conclusion from what you are saying?

Templeman: No, I do not think I can comment on that.

Sanjay: Mr Templeman, I'm sorry but you are a witness in this case. You have made an allegation against my client. You should have read the report before coming to testify. Please look at the report again and answer my question. Your finding is different than the PAC finding in 2016?

Templeman: Yes.

Templeman, who has 24 years of experience in investigating complex fraud and financial crimes also confirmed that Arul Kanda’s name was never mentioned in the United States Department of Justice’s civil lawsuit on July 21, 2016. 

In 2016, the PAC released a 106-page report concluding the financial problems that plagued 1MDB were primarily due to mismanagement by Shahrol Azral, who helmed the fund from 2009 to 2013. 

After Shahrol Azral's tenure, Mohd Hazem Abd Rahman briefly served as 1MDB’s CEO before Arul Kanda took over from early 2015 until mid-2018.

In May 2021, 1MDB filed a lawsuit against Mohd Irwan and Arul Kanda over an alleged breach of trust and conspiracy that resulted in USD1.83 billion in losses related to the company's investment in 1MDB-Petrosaudi Ltd.

 1MDB-Petrosaudi Ltd was later converted into the Brazen Sky Limited investment, said to be 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 is seeking USD6.59 billion in damages from both defendants for these violations and an additional RM2.9 million from Mohd Irwan related to the extension of an employment agreement.

The trial before Judicial Commissioner Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan resumes tomorrow.

-- BERNAMA