By Chan Quan Min
Even before Arul Kanda steps into his office at the 1Malaysia Development Bhd (1MDB) headquarters on Jalan Sultan Ismail, there is doubt over whether he would ever be given the leeway to fix the strategic investment fund’s many problems.
“I’m not sure whether he will have the capacity and freedom to clean up 1MDB,” said Rafizi Ramli, the MP for Pandan at a press conference today.
Rafizi and Kanda are contemporaries going way back when both were in university in the United Kingdom, Rafizi explained.
While Rafizi has often been one of 1MDB’s sharpest critics, he appears to have saved kinder words for Kanda.
According to the senior PKR leader, Kanda is the right choice given his international experience in the financial capitals of the UK and Middle East.
Rafizi considers Kanda as extremely “media savvy” but worried that his appointment as CEO was a move to further hide the irregular financial dealings of the state-owned fund.
The real issue is whether the higher powers will prevent him from doing what is necessary to fix 1MDB, which would be a “shame” if true, Rafizi said while responding to a question from the media.
He said the fund was ultimately controlled by its board of advisors led by the Finance Minister, a post held by the Prime Minister Najib Abdul Razak.
1MDB has drawn flak from Malaysia’s financial and internet media for less than ethical practices of loan mispricing, papering over losses with land revaluation gains and stashing billions in borrowed cash in low yielding investments overseas.
Many of the fund’s loans were issued with government guarantees, presenting a systemic risk to the economy should the fund fail to repay its debts and collapse.
To date the fund has made investments in several power generation assets in Malaysia and internationally and has broken ground on a massive property development dubbed Tun Razak Exchange (TRX) on the edge of Kuala Lumpur’s Golden Triangle.
In a worst case scenario, Kanda could be consigned to carry out “continuous defensive work for lousy decisions which were not his in the first place,” the politician told Malaysiakini yesterday.
“It is not so much whether the CEO is capable, the modus operandi (of 1MDB) is cloaked with secrecy, making it a difficult atmosphere for anyone,” Rafizi added.
1MDB chairperson Lodin Wok Kamaruddin in a statement yesterday said Kanda would replace Mohd Hazem Abdul Rahman as CEO with immediate effect.
Kanda was also appointed president and group executive director at the same time. “It is time for the company to silence its critics and deliver against its stated objectives,” Lodin said of the appointment.
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