Testifying in his defence to a civil suit brought by 1MDB, Arul, who was also the group president, said he read several reports soon after joining the company in January 2015.
He said this when cross-examined by 1MDB’s counsel, Lim Chee Wee, over US$700 million in 1MDB funds that landed in the accounts of Good Star Ltd, an entity that belonged to fugitive businessman Low Taek Jho, or Jho Low.
1MDB entered into an agreement with Petro Saudi International Ltd pursuant to which it was required to contribute US$1 billion, equivalent to 40% of the equity, into a joint venture project.
However, only US$300 million was paid to the joint venture, with the remaining US$700 million diverted to Good Star.
Lim referred Arul to four reports in Sarawak Report, the Edge, South China Morning Post, and Euromoney that were published between February and April 2015.
Lim: You read all the articles. Did you instruct any investigations?
Arul: No.
Lim: Neither did you lodge police reports, engage forensic accountants, or get in touch with local or foreign lawyers.
Arul: Yes.
Arul said he was also aware of a video by former Damansara MP Tony Pua and statements by PKR leader Rafizi Ramli disparaging the company over its foreign investments.
“Before joining 1MDB, I researched about the company and came across negative reports and statements by Pua and Rafizi, but I do not recall the particular articles,” he said.
In May 2021, 1MDB filed a lawsuit accusing Arul and former 1MDB chairman Irwan Serigar Abdullah 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 (IPIC) 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’s defence is that he left it to the police, the Malaysian Anti-Corruption Commission, the national audit department, and Parliament’s Public Accounts Committee to investigate wrongdoings in the company.
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 Minister of Finance Inc in May 2016, said he was appointed to specifically steer 1MDB through the rationalisation plan.
Lawyers Sanjay Mohan and Adam Lee appeared for Arul, while counsel Lavinia Kumaraendran and Mavin Thillainathan represented Irwan.
Counsel Brendan Navin Siva and Raphael Kok are assisting Lim.
The hearing before Justice Raja Ahmad Mohzanuddin Shah Raja Mohzan continues on Feb 3.