Testifying in his defence to a civil suit brought by 1MDB against former 1MDB chairman Irwan Serigar Abdullah and himself, Arul Kanda Kandasamy told the High Court that he only became aware of the purchases after the US Department of Justice (DoJ) took legal action against a number of defendants and assets.
He said he later discovered that monies raised by 1MDB, including from two bonds exercises and two loans, were also used to purchase a luxury yacht and real estate, including a property registered in the name of Kassem Dean, the husband of singer Alicia Keys.
Arul said he also subsequently came to know that fugitive financier Low Taek Jho (Jho Low) and his associate Eric Tan were beneficial owners of monies deposited in various bank accounts.
“I did not have personal knowledge of these transactions including the purchase of jewellery for Rosmah who is the wife of ‘Malaysian Official One’,” he said when cross-examined by 1MDB lawyer Raphael Kok.
It was revealed in court yesterday that “Malaysian Official One” was a reference to Najib.
The DoJ document also showed that US$1.3 million had been spent on purchasing 27 gold necklaces and bracelets for Rosmah.
In May 2021, 1MDB filed a lawsuit accusing Arul and Irwan of breach of trust and conspiracy which led to alleged losses of US$1.83 billion, linked to the company’s investment in 1MDB-Petrosaudi Ltd. The funds were said to have been converted into a Brazen Sky Ltd investment, and were purportedly recoverable from the Bridge Global Fund.
1MDB also alleges that the pair misappropriated US$3.5 billion in company funds which was paid to Aabar Investments and another US$1.265 billion paid to the International Petroleum Investment Company on May 9, 2017.
1MDB further alleges that Irwan conspired with Arul to extend his employment agreement, resulting in a payment of RM2,905,200 to Arul in disregard of the company’s interests, leading to financial losses and damages.
The company is seeking US$6.59 billion in damages from the duo and an additional RM2.9 million from Irwan related to the extension of the employment agreement.
Arul was appointed 1MDB director in January 2015 and redesignated as CEO and group president the following year.
His defence is that he left the probe of various wrongdoings to the police, the Malaysian Anti-Corruption Commission, the national audit department and Parliament’s Public Accounts Committee.
He said his role as CEO was to implement a rationalisation plan aimed at turning the company around, settling its existing debts and kick-starting stalled projects, including Bandar Malaysia and TRX Development.
Irwan, who was appointed chairman by the Ministry of Finance Inc in May 2016, said he was appointed to specifically steer 1MDB through the rationalisation plan.
Lawyer Sanjay Mohan and Adam Lee appeared for Arul while counsel Lavinia Kumaraendran and Mavin Thillainathan represented Irwan.
The hearing before Justice Raja Ahmad Mohzanuddin Shah Raja Mohzan resumes tomorrow.