Attacks against 1MDB largely due to ‘misunderstandings’, new chief says
(Malay Mail Online) – Most of the controversies surrounding 1Malaysia Development Berhad (1MDB) has to do with misconceptions over the nature of the state-backed investment fund’s business, said its new president and group executive director Arul Kanda Kandasamy.
In a report today on Malaysiakini, the former banker was quoted saying that the sovereign fund is built on a solid foundation and he is “confident” that the problems it currently faces could be overcome.
“I genuinely believe that the majority of the allegations that have been directed at the company have more to do with a misunderstanding of the business, or are raised for purposes that aren’t necessarily business related, as compared to any real issues that exist within 1MDB,” he said, in an email interview with the news portal.
“Whilst I can’t speak about anything that may have happened in the past, I have confidence that I would have the full support of the board and our shareholders to lead the business and steer it in the direction that would allow us to generate maximum value,” he was quoted saying.
Arul Kanda also said that he is “confident” that 1MDB’s assets, projects and pool of talents are factors that would drive the fund’s business forward.
He said he recognises the challenges that 1MDB would have to address, and added that a strategic review is the first step in such a process.
“Any company, be it an international conglomerate or a small corner store, has challenges that it would have to face from time to time. The same is true of 1MDB.
“…But I am confident that we would be able to overcome these and realise the full value of the excellent assets within the business,” he said.
Arul Kanda also stressed that he is well-aware of the criticisms levelled against the company, but stressed that he is not deterred by them.
“I have come into this role with my eyes wide open,” he said.
“As such, when considering whether to take on this role, I examined every slew of information I could find about 1MDB, be it the company’s previous annual reports or articles carried by the media.
“I also held in-depth discussions with the board about some of the issues that have been raised by outside parties. They were very frank and transparent with me,” he added.
Yesterday, Bloomberg reported Arul Kanda defending the investment company’s credentials, insisting that it has been a “responsible borrower”.
The business wire said that 1MDB’s borrowings climbed to RM41.9 billion last year from RM36.2 billion in the previous period, although it was cashed in more than RM4 billion from investments in segregated portfolio companies registered in Cayman Islands since the end of March last year.
1MDB has been dogged by negative publicity over massive fees paid for bond sales, the near one-year delay in publishing its financial accounts, and its previous changing of auditors.
