Friday, February 27, 2015

1MDB CEO Arul Kanda Should Start Giving Straight Answers

1MDB CEO Arul Kanda should stop trying to be clever by beating around the bush with his constant pussyfooting and start giving straight answers to simple questions.

Newly appointed 1MDB CEO, Arul Kanda Kandasamy stormed into his role like a whirlwind on the 5th January, nearly sweeping many off their feet.  He gave dozens of interviews, injected a shot of confidence into a fumbling 1MDB and certainly sounded like a man who meant business.

However over the past month, Arul Kanda had sounded more like a man who is performing awkward evasive manoeuvres to hide the colour of his briefs after discovering a glaring tear in his trousers.

When asked by The Edge Weekly on the 15th January 2015 if 1MDB is unable to repay its loans, Arul only offered a flat denial.  He said “You just made a whole series of assumptions, assumptions that 1MDB can’t pay.  That is not the case… I’m telling you your assumption is incorrect.”

However when given the opportunity to “clarify [1MDB’s] liquidity position”, he could only lamely respond that “on the specific numbers, I don’t have the accounts with me”.  The CEO even proudly declared to Bloomberg that 1MDB was a “responsible borrower”.

Thanks to Arul, the financial circles snigger aloud whenever the term is ever brought up in a conversation today.  This was since 1MDB had to beg local billionaire Tan Sri Ananda Krishnan for a RM2 billion loan to settle a debt which was extended at least thrice.

Despite that, Arul Kanda continued to put up a false front, claiming that it was just “speculation” that 1MDB had to stoop to borrowing from Tan Sri Ananda.  The fact that he adamantly refused to deny or confirm the alleged “speculation” says a lot about his courage to be transparent.

Earlier on 13 January, when faced with mounting public criticism, Arul Kanda had surprised the market by issuing a short statement that “1MDB can confirm that it has now redeemed in full the US$2.318 billion invested by the company in a Cayman Islands registered fund”.

What was perhaps thought to be a clever use of the word “redeemed”, threw the public into confusion because nobody knew exactly what Arul Kanda meant by “redeemed”.  Does “redeemed” means repatriated?  Would the redemption be in cash or in assets?

It was nearly a month later on 7 February when he clarified to Singapore Business Times that “I said the remaining sum has been redeemed. I never said anything about repatriation of funds.”  Despite that, until today, we don’t know whether the redeemed US$1.1 billion is in cash or assets, or as Tun Dr Mahathir Mohamed himself asked, deposited in which bank in which country.

The whole game of being economical with the truth via a careful play of words became a farce when he addressed the allegations that parties connected to Jho Low are involved in 1MDB.  Arul Kanda cleverly dismissed the allegation that Jho Low’s friends or his father was a Director in 1MDB in an interview with Mingguan Malaysia.

However, when it was exposed in The Malaysian Insider (TMI) that Tan Sri Ong Ghim Huat who serves as a Director of 1MDB was a long-time friend and business partner of Jho Low’s father, Arul had the thick skin to rebuke TMI, claiming he never said Jho Low’s father’s bosom buddy was not a Director.

Now, when faced with difficult questions which he is unable to provide a straight answer, he skirts them by saying, "in relation to all these speculations, all I can say is that every year, we produce detailed accounts which is publicly accessible. That is the right platform. I hope that 1MDB would be given the same right like other private firms.”

With all due respect to the now not-so-new CEO of the company with RM42 billion of debts, the wholly-owned subsidiary of the Government does not have “the same right like other private firms”.  This is because very simply 1MDB isn’t “private”, especially since the Federal Government had guaranteed at least RM16 billion of its debt directly or indirectly.  What’s more, there are now alleged “speculations” that 1MDB is asking for RM3 billion of bailout funds from the tax-payers’ kitty!

Finally, we have also come to learn that Arul Kanda doesn’t honour his words.  I was delighted when he offered to “share his insights” with me on 1MDB exactly 6 weeks ago.  Since immediately accepting his offer, it would appear that the man has decided that he would be better off to renege on his invite than engage on a tête-à-tête with a critical Member of Parliament.

Therefore, since 1MDB has also not responded to the offer by the Public Accounts Committee (PAC) Chairman, Datuk Nur Jazlan Mohammad a month ago to volunteer to testify with the PAC, I would like to give my wholehearted support to his renewed call, this time to request the Auditor-General to conduct an “immediate audit” on 1MDB followed by being summoned to the PAC.  This appears to be the only way we will be able to obtain straight answers from 1MDB.

Surely we can also expect Arul Kanda to give his wholehearted support as he had declared that “public scrutiny” is such “a good thing” for 1MDB.

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