Pua: What was Arul Kanda’s ‘conflict of interest’?


GEORGE TOWN: Tony Pua says if reports that the finance ministry had removed Arul Kanda from the boards of Bandar Malaysia Sdn Bhd and TRX City Sdn Bhd are true, it is a “big deal”.

The Petaling Jaya Utara MP said the report of a “conflict of interest” pertaining to Arul as published in a portal yesterday, must also be addressed by the 1MDB CEO as well as his bosses in the finance ministry.

“I am not making any allegation, but am just asking what ‘conflict of interest’? Was he playing both sides? I do not know.

“If Arul has indeed been removed from TRX City and Bandar Malaysia suddenly, then it is a big thing, as this comes right after the collapse of the deal with Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp,” Pua said.

Pua, who is also DAP national publicity secretary, also questioned the finance ministry for having appointed Arul to the board of Bandar Malaysia and TRX City in the first place.

Yesterday, a news portal cited sources as claiming that Arul was removed from the boards of the two companies, and that the dismissal came as there may be “potential conflicts of interest” in the fallout from the failed Bandar Malaysia deal with the consortium of IWH and China Railway Engineering Corp (CREC).

Arul told FMT that he had not been officially notified of his apparent dismissal as director of TRX City and Bandar Malaysia. TRX City, which was previously known as 1MDB Real Estate Sdn Bhd, is a wholly-owned company under the finance ministry.

He said decisions regarding board of directors of both firms were up to the finance ministry.

“It is public information that my appointment as a board member of TRX City and Bandar Malaysia was due to 1MDB being the shareholder of both firms.

“As those companies have been transferred by 1MDB to MOF Inc (under the finance ministry) with effect from March 31, 2017, it is only reasonable to expect that MOF Inc will seek to appoint new directors, per its discretion,” Arul said yesterday.

Asked on the allegation of a “conflict of interest”, Arul said as a professional manager, “I serve as required by the shareholder”.

Pua spoke to reporters after delivering a one-hour lecture on 1MDB to some 600 people at the Penang Chinese Town Hall, Pitt Street here last night.

On May 3, TRX City said the share sale agreement (SSA) with IWH and CREC regarding the sale of 60% of the issued and paid-up capital of Bandar Malaysia had lapsed.

It said this was due to the failure of the purchasing parties to fulfil payment obligations.

In a statement, TRX City said despite repeated extensions being granted, IWH-CREC failed to meet the payment obligations outlined in the conditions under the SSA, which was signed on Dec 31, 2015.

Following that, it said given a significant appreciation in the value of the Bandar Malaysia land, TRX City’s sole shareholder, the finance ministry, would now be retaining 100% ownership of the site to ensure the Malaysian people benefited from its development in its entirety.

Arul was made 1MDB president and CEO in January 2015 and retains the post despite this latest development.