The mysterious 1MDB 'fund units', three years on

INTERVIEW | Arul Kanda Kandasamy was brought into 1MDB as its chief executive officer at a time of crisis, in early 2015, as debt collectors came knocking.

At that time, 1MDB was also facing mounting pressure on the status of Brazen Sky Ltd's US$2.33 billion "units" investment in a Cayman Islands-registered fund. Brazen Sky is a subsidiary of 1MDB.

This was Arul Kanda's first order of business when he declared, a week after his appointment, that the 2012 Cayman Islands investment had been fully redeemed.

"1MDB hopes that the redemption of these funds, in full, draws a line under this matter,” he said in a statement on Jan 13, 2015.

But to date, a line could not be drawn as the investment in Bridge Global Absolute Return Fund SPC, the Cayman Islands-registered fund, was never fully redeemed.

Malaysiakini, in a recent interview with Arul Kanda, grilled him about the status of the "fund units".

When Arul declared the Brazen Sky "fund units" were fully redeemed at the beginning of his tenure, US$1.39 billion was supposedly in cash and immediately expended while the remaining US$940 million in units was meant for a sale to Aabar Investments PJS Limited (Aabar BVI).

It caused a stir when caretaker prime minister Najib Abdul Razak, who is also caretaker finance minister, claimed the remaining amount was also redeemed "in cash" but the Finance Ministry was later forced to clarify, two months later, that it was still in "fund units".

Arul Kanda later took the rap, claiming that he thought the redemption was fully in cash as he was unaware of the planned sale of a portion of the fund units, which was inked before his appointment.

The sale of the remaining US$940 million Brazen Sky "fund units" to Aabar BVI never took place...