3 CEOs, 3 auditors, 2 chairmen in 5 years, and still nothing’s wrong at 1MDB?

By admin-s On Jan 6, 2015

(TMI) – 1Malaysia Development Bhd (1MDB) has the distinction of being possibly the only government-linked company (GLC) to have changed three chief executive officers (CEOs), three external auditors, and two chairmen all in a span of only five years.

While both the government and 1MDB via its chairman Tan Sri Lodin Wok Kamaruddin insist that there is nothing amiss at the strategic investment fund, this merry-go-round of its top brass and auditors should be a red flag.

The departure of Mohd Hazem Abdul Rahman who replaced its first CEO Datuk Shahrol Halmi in March 2013, raises more alarm bells.

“A third CEO in five years, three accountants in five years, debts of more than RM40 billion… I’m only concerned (as to) who will bear responsibility if and when something goes wrong?” a veteran corporate player asks.

The Edge Financial Daily understands that Hazem’s departure coincides with the strategic investment fund, obtaining yet another extension – until January 30 – to settle a RM2 billion debt which first went due at end-November 2014, but was extended to end-December last year.

While the company has been mired with losses, it is into its third auditor, starting with Ernst & Young, moving on to KPMG and now tying up with Deloitte.

Arul the new CEO

The appointment of Arul Kanda Kandasamy as its third CEO has also raised alarm bells as it is seen by some corporate players as Low Taek Jho (Jho Low) and Abu Dhabi interests strengthening their hold on 1MDB.

While Jho Low has often denied any links to 1MDB, his name consistently surfaces when 1MDB is mentioned.

Arul was on the board of RHB Capital Bhd from July 2009 to May, 2011, as a non-independent non-executive director representing Abu Dhabi Commercial Bank PJSC. He was executive vice-president, head of investment banking and head of corporate finance at Abu Dhabi Commercial Bank.

Abu Dhabi Commercial Bank bought RHB Capital in May 2008, acquiring 538.37 million shares or 25% of RHB Capital from the Employees Provident Fund (EPF). It later sold the block to its related entity to Aabar Investments PJS.

It is well known that Jho Low brokered the deal for Abu Dhabi Commercial Bank to buy into RHB Capital, and Abu Dhabi-Kuwait-Malaysia Investment Corp buying into UBG (formerly Utama Banking Group Bhd), and even for Abu Dhabi Commercial Bank selling its RHB stake to Aabar Investments PJS.