KUALA LUMPUR (Sept 10): A financial fraud investigator admitted on Tuesday that his conclusions after investigating 1Malaysia Development Bhd’s (1MDB) fraudulent transactions did not tally with the findings of the Public Accounts Committee (PAC) report from eight years ago.

Richard Templeman agreed that he had not read the 2016 PAC report when coming to his conclusions on what happened to billions of ringgit in 1MDB funds.

Templeman, who was testifying as the first plaintiff witness at the High Court hearing of the US$6.59 billion lawsuit by 1MDB against its former CEO Arul Kanda Kandasamy and board chairman Tan Sri Irwan Serigar Abdullah, said this during cross-examination by Arul Kanda’s lawyer, Sanjay Menon.

The PAC report had blamed Arul Kanda’s predecessor Datuk Shahrol Azral Ibrahim Halmi, among others, for the financial mismanagement in 1MDB. However, Templeman, in his witness statement. laid the blame on Arul Kanda and Irwan for 1MDB’s failures.

Shahrol was the CEO from 2009 to 2013, before Arul Kanda took over from January 2015 to June 28, 2018.

Sanjay pointed out to Templeman that it was during Shahrol’s tenure that the bulk of the fraudulent transactions in 1MDB had taken place and that there was no misconduct on Arul Kanda’s part.

The UK-based investigator had, however, stated in his witness statement that Arul Kanda and Irwan should have flagged these transactions and should have known about them when they came into the company.

Sanjay: Look at the PAC report and look at your findings. It’s a very different conclusion. Are you able to answer that?

Templeman: No, I don’t think I can comment without seeing the PAC report.

Sanjay: I’m sorry but you’re a witness in this case. You’re making allegations against my client. You should have read the report before coming.

Templeman: Yes.

Sanjay: Based on the PAC report, there is no evidence stating any misconduct by my client, yes?

Templeman: This was clarified by the former attorney-general (Tan Sri Mohamed Apandi Ali).

Things then got heated as Sanjay questioned Templeman about his allegations against Arul Kanda without having read the PAC report.

Sanjay: You haven’t read the PAC report and other documents? Then how can you make these allegations against my client?

Templeman: I am not making allegations.

Sanjay: Let me ask you for the record: are you making any allegations against the defendant (Arul Kanda)?

Templeman: No.

Templeman said that witness statements were based on his findings and investigations.

The case is on its second day of trial before Judicial Commissioner Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan via Zoom as Templeman is testifying from his offices in London.

According to the suit filed by 1MDB in May 2021, Arul Kanda and Mohd Irwan were liable for breach 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.

IMDB also alleged that Arul Kanda and Mohd Irwan committed breach of trust and conspiracy by misappropriating US$3.5 billion of 1MDB's 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 damage.

Among others, 1MDB 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.

https://www.theedgemarkets.com/node/726227