KUALA LUMPUR (Sept 17): Former Public Accounts Committee (PAC) member and former member of Parliament (MP) Tony Pua testified in court on Tuesday that former 1Malaysia Development Bhd (1MDB) chief executive officer (CEO) Arul Kanda Kandasamy had made inaccurate representations to the sovereign fund’s board of directors, and inaccurate public statements on behalf of the fund, in relation to the purported sham investments the company had made.

Pua, who was testifying as a witness for 1MDB in its US$6.59 billion lawsuit against Arul Kanda and board chairman Tan Sri Mohd Irwan Serigar Abdullah, had said that Arul Kanda also gave “inaccurate representations” about a US$1.83 billion sum invested by 1MDB in 1MDB-PetroSaudi Ltd, a joint-venture between 1MDB and PetroSaudi Holdings (Cayman) Ltd, which is known as the Brazen Sky investment.

“I have discovered, from the documents of 1MDB, media statements, my involvement in the PAC, and other sources, that Arul Kanda made inaccurate representations to the board of directors of 1MDB, and inaccurate public statements on behalf of 1MDB, in relation to the status of the Brazen Sky investment,” he said.

“This gave the impression that there was an actual investment made by Brazen Sky in the Bridge Global Fund, when there was not a sen invested. It was in reality a fraudulent scheme to deceive the public and hide 1MDB’s losses,” he said.

He then went on to say that Arul Kanda did not take steps to investigate these investments when he joined the company in 2015.

“Upon joining 1MDB in January 2015 and during his time in charge of [the] management of 1MDB, Arul Kanda had failed to take appropriate steps to investigate and ascertain the facts and circumstances leading to the purported investment in the Bridge Global Fund (the US$1.83 billion investment), and to recover the monies lost by 1MDB in the course of, or as a result of the purported investment, which caused 1MDB loss and damage,” Pua had said through his sworn witness statement about the PAC meeting.

He said that during the PAC’s examination on 1MDB to assess its financial performance and activities, so as to ascertain whether 1MDB met its original objectives, Arul Kanda was “evasive” and “digressed” from the requested answers, and Arul’s promises thereafter were never fulfilled.

“I have found that, during questioning on matters such as the Brazen Sky investment, Arul Kanda was evasive, digressed from the requested answers, and made promises to produce documents after the meetings, which were subsequently never produced,” Pua had said in his sworn statement.

Furthermore, in 2018 when the Barisan Nasional government fell and DAP’s Lim Guan Eng was the finance minister, Pua, who was then the political secretary to Lim, said that he had attended a meeting with representatives of 1MDB to determine the financial status of the company.

Pua said that in the May 22, 2018 meeting, Arul Kanda had claimed that all financial matters in the company were handled by 1MDB’s then chief financial officer (CFO) Azmi Tahir.

“In this meeting, when asked about 1MDB’s investments, Arul Kanda claimed that all financial matters were handled strictly by the chief financial officer (CFO) of 1MDB, Azmi Tahir, and he (Arul Kanda) was absolutely uncertain as to what the value of these ‘investments’ were, or whether they even exist in the first place,” Pua said.

Pua said that it was clear that Arul Kanda was in breach of his contractual and fiduciary duties to 1MDB.

1MDB filed the suit in May 2021, and claimed that both Arul Kanda and Mohd Irwan were liable for breaches of duties and breach of trust, resulting in the company suffering losses amounting to US$1.83 billion in relation to its investment in 1MDB-Petrosaudi Ltd, which was converted into stakes in Brazen Sky Ltd and then converted into an investment in Bridge Global Fund.

It also alleged that Arul Kanda and Mohd Irwan committed breach of trust and conspiracy by misappropriating US$3.5 billion of 1MDB money and paying it to Aabar Investments PJS Ltd — a shell company pretending to be a subsidiary of International Petroleum Investment Company (IPIC) — and subsequently paying another US$1.265 billion to IPIC in May 2017.

1MDB also claimed that Mohd Irwan had conspired with Arul Kanda to cause the fund to implement an employment extension agreement that resulted in it paying RM2.91 million to Arul Kanda, regardless of 1MDB’s interests, causing it to suffer losses and damages.

Among others, the strategic development company is seeking RM30.91 billion from the duo as a result of the purported breaches, and the return of the RM2.91 million from Mohd Irwan in relation to the employment extension agreement.