Lim Guan Eng: 1MDB Is Insolvent And Arul Kanda Is "Utterly Dishonest"

The 1MDB president denied knowing about the state of RM9.8 billion worth of investments in a meeting yesterday.

Cover image via Kementerian Kewangan Malaysia/Facebook

Yesterday, 23 May, Finance Minister Lim Guan Eng revealed at a meeting to discuss 1Malaysia Development Berhad (1MDB)'s financial affairs that the company was "insolvent" and unable to pay debts owed

In a statement released after meeting with 1MDB's Board of Directors at the Ministry of Finance of Malaysia, Lim said that the board was unable to explain what had happened to the RM9.8 billion (US$2.46 billion) of overseas investments that could help meet 1MDB's financial obligations over the next few years, Channel NewsAsia reported.

On Tuesday, 22 May, Lim announced that Malaysia's debts had exceeded RM1 trillion, with 1MDB as the main contributor.

Lim attended two meetings to determine 1MDB's financial status yesterday, along with deputy treasurer-generals Datuk Siti Zauyah Md Desa, Datuk Ahmad Badri Mohd Zahir, and Datuk Asri Hamidon

According to Malay Mail, the first meeting was with the Board of Directors, Datuk Norazman Ayob, and Datuk Kamal Mohd Ali.

Meanwhile, the second meeting was with 1MDB president and chief executive Arul Kanda Kandasamy, who was accompanied by the former CFO Azmi Tahir and former general counsel Ivan Chen.

Lim Guan Eng called 1MDB president Arul Kanda, who explained that he was on garden leave and unaware of the firm's financial situation, "utterly dishonest and untrustworthy"

Lim contended that, "It is completely unbelievable that a highly paid and 'experienced' investment banker can be so irresponsibly clueless as to not know whether RM9.8 billion worth of investments are even real," Malay Mail reported.

The Finance Minister accused Arul Kanda of "singing a completely different tune" in the meeting compared to the statements he made on 1MDB's financial viability before the change of government, adding that his response was "utterly shocking and preposterous."

According to Free Malaysia Today, Lim said he had instructed the legal advisers to the ministry to review the 1MDB president's position.

Today, 24 March, Arul Kanda has insisted the alleged wrongdoings at 1MDB occurred before he even joined the firm

The 1MDB president's statement read, "It cannot be disputed that I joined 1MDB only in January 2015, that is to say, after the actions of previous management and boards resulted in 1MDB amassing its debt burden, and after many of 1MDB's projects were in difficulties."

Arul did not dispute Lim Guan Eng's conclusion that 1MDB was effectively insolvent, however, he "strongly denied the potentially defamatory and personal attacks made by the Minister of Finance," Malay Mail reported.

Arul is among those barred from leaving the country over the 1MDB corruption scandal.

Read Lim Guan Eng's full official statement here:

On Tuesday, Lim Guan Eng revealed that the Finance Ministry has been paying off 1MDB's debt since April 2017:

Prime Minister Tun Dr Mahathir Mohamad has formed a special investigation team to thoroughly probe into 1MDB:

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