By Adrian Phung From the Sun Daily

KUALA LUMPUR: A DAP lawmaker Tony Pua is urging newly appointed 1Malaysia Development Board (1MDB) chief executive officer Arul Kanda Kandasamy to come clean on the whereabouts of the US$488 million (RM1,776 million) profits arising from the 1MDB joint venture with Petrosaudi International Limited (PSI).

He claimed that so far the state investment fund has failed to reveal the whereabouts of the profits it has made from the joint venture (JV) the former had entered with PSI back in 2009 despite multiple claims from the CEO that the money had been secured.

“If they (1MDB) do not come clean about their alleged opaque accounting, it will just make the whole JV looks like a con job or a highly elaborate scam to siphon money from 1MDB.

“This is because it was not possible for a newly set-up subsidiary company, 1MDB Petrosaudi Limited, to owe its parent company PSI an astonishing amount of US$700 million after just a week into its operation and few days later 1MDB decided to invest US$1 billion in cash into the company to subscribe for 40% of its shares even though knowing it very well that the subsidiary had an outstanding debt,” said Pua at DAP headquarters in Kuala Lumpur today.

Pua alleged that the shares which 1MDB had bought was later sold back to Petrosaudi at US$1.2 billion but instead of receiving money from the sales, they lent the money back to 1MDB Petrosaudi in the form of Murabaha notes or a form of Islamic loan.

He questioned the agenda or motive behind the move because if 1MDB did not believe in the business models any more, then why in the first place Arul Kanda has to terminate the JV agreement six months later in March 31, 2010, and then turn around and lend money to the venture again.

“This whole thing is really suspicious because later on, it was found out that 1MDB had twice extended loans via the Murabaha notes to the Petrosaudi subsidiary, US$500 million in 2010 and another US$200 million in 2011, making the total loan extended to US$1.9 billion.

“Then in September 2012, those notes were sold to an undisclosed party for US$2.318 billion, giving 1MDB a profit of US$418 million but the profits did not returned to the company, instead, it was invested into a mysterious investment scheme in the Cayman Islands where even 1MDB’s auditors were not able to determine its value,” Pua said.

Finally, after much public pressure and criticism, Pua added that the controversial funds in Cayman investment were fully redeemed earlier this year but Arul Kanda has refused to disclose the whereabouts of the US$1.103 billion balance proceeds from the redemption after some US$1.22 billion was being utilised to pay off debts and other liabilities.

“Arul Kanda’s refusal to disclose the whereabouts of the balance proceeds is definitely mind-boggling to the points where it leads us to believe that there is some massive cover up of a multi-billion ringgit fraud,” Pua claimed.

For more on this story go to: http://www.thesundaily.my/news/1336713
IMAGE: antarapos.com

See related iNews Cayman story published February 16 2015 “PAC, summon previous 1MDB auditor, too’ at: http://www.ieyenews.com/wordpress/pac-summon-previous-1mdb-auditor-too/