‘Massive fraud’ likely behind deal with Aabar BVI, says Arul

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PETALING JAYA: President of embattled state investment fund 1Malaysia Development Berhad (1MDB), Arul Kanda Kandasamy has raised the likelihood of “massive fraud” behind the firm’s payment of billions to a “fake” company in the British Virgin Islands.

“What we cannot discount is there could be a fraud..a massive fraud..and maybe there was collaboration from our side”, Arul was quoted by Malaysiakini as saying in an interview with The Edge Financial Weekly regarding the USD3.5 billion payment 1MDB made to the “fake” Aabar BVI.

This revelation by Arul was made after Abu Dhabi-based International Petroleum Investment Company (IPIC) and Aabar Investments PJS recently declared they had no link whatsoever to Aabar BVI, registered in the British Virgin Islands. 1MDB however did have business dealings with Aabar BVI, at times even without the approval of its board of directors.

Arul also confirmed plans to quit 1MDB, saying the issues at the fund were not of his making and not “what I signed up for.”

The report also quoted him as saying that 1MDB’s failure to settle its USD1 billion loan from IPIC may trigger cross defaults on the fund’s other debts, including some bonds.

He revealed that the USD1 billion was due to be paid to IPIC by December last year and added, “Actually, we were in default since December. It (Aabar’s announcement) should have been made immediately after the default as it’s a large amount.

“Why wait until April to say you don’t own Aabar BVI?”