KUALA LUMPUR: Najib Razak has hit back at Lim Guan Eng for making an issue out of the salary package for former 1MDB boss Arul Kanda Kandasamy, saying the finance minister was not only being vindictive but also trying to divert attention from the mistake of accusing a Chinese company of links to 1MDB’s debts.
“Why do you want to victimise Arul and even show his letter of appointment and contract which is supposed to be private and confidential to the press?” Najib told FMT.
“Doesn’t Arul have his rights to privacy too?”
Lim had said that he would sue Arul, whose contract with 1MDB was terminated by the finance ministry just two days short of its expiry on June 30, to recover half of the RM5 million in salaries which was paid to him in advance.
Lim had revealed that Arul’s contract for the six months of this year was worth RM5 million. Najib had then defended the salary package, saying it was considered a pay cut for Arul, who was paid much higher as the head of investment with an Abu Dhabi-based bank before he was roped in to head the troubled 1MDB.
Lim had later asked if Arul was paid RM10 million a year in his previous job.
But Najib said he had never suggested that Arul had been earning RM10 million annually.
“The RM5mil ex-gratia payment is not his salary for 6 months. It is an ex-gratia payment at the end of his contract, taking into account certain objectives achieved during his term at 1MDB. His monthly salary is very much lower than that,” said Najib.
He said the ex-gratia payment compensated for the total amount he had received in salaries from 1MDB since 2015 which “was lower than his USD based and tax-free pay package in the UAE”.
“Arul gave up his job as the executive vice-president and head of investment banking in the largest commercial bank in Abu Dhabi to lead the restructuring of 1MDB. He was paid in US dollars and it was tax-free,” Najib told FMT.
“I am sure you can find out how much top investment bankers can make in terms of salaries and bonuses,” he said, adding that Arul was happy to take the pay cut “as he thought then it was a form of national service”.
Najib said Lim and his special officer, Damansara MP Tony Pua, were deliberately twisting his words to divert attention from a rebuttal by China Petroleum Pipeline Company (CPPC) over a claim that the firm, part of state-owned China National Petroleum Corporation, was paying 1MDB debts through funds from its two pipeline projects in Malaysia.
Pua told BBC recently of possible links between 1MDB and the pipeline projects in Kedah and Sabah.
“The entire project smelled like a scam. [There were] clearly elements of money laundering taking place,” Pua was quoted as saying. “We were giving money out – to a Chinese company – and we suspect this money is being funnelled to parties related to the previous administration.”
Najib said both Lim and Pua should immediately explain or they would be “deemed as having lied and made defamatory statements”.
“How can they allow one of the largest companies in the world to call our finance minister as well as his special assistant liars and accuse him of defamation?”