Arul Kanda Kandasamy testified in court that his early tenure at 1MDB included moments where he may have misrepresented the company to its board and to the public, but he stressed that he was new and had to rely on others as he navigated a complex web of deals, transactions, and management changes. The testimony, given during a high-stakes legal fight over billions of dollars linked to 1MDB’s PetroSaudi deal and related arrangements, sheds light on how governance, communications, and collateral transactions unfolded in the critical first days of his leadership. It also underscores the broader tensions within 1MDB as it faced investigations, lawsuits, and allegations of misappropriation involving top executives, state-linked lenders, and a constellation of offshore entities. The statements touch on the timing of key events in January 2015, the management of Brazen Sky, and the role of Jho Low and other figures who allegedly influenced the fund’s operations long before and after Arul Kanda’s appointment. This article reconstructs the sequence of events, the claims raised in court, and the implications for corporate governance, accountability, and the ongoing debates about how 1MDB’s financial decisions were made and disclosed.
Background and the appointment: a pivotal January 2015 turning point
When Arul Kanda Kandasamy stepped into the presidency and chief executive role at 1Malaysia Development Bhd (1MDB) in the first week of January 2015, it marked a significant transition for the state development fund that had become the centerpiece of a sprawling set of financial arrangements and international investigations. He was brought in to replace Mohd Hazem Abdul Rahman, the former managing director who chose to resign around the same time that Arul Kanda assumed leadership. The sequence of events surrounding this leadership change became a focal point of the testimony and the legal proceedings that followed, as it raised questions about governance, oversight, and the rapid pressures facing 1MDB as it sought to manage existing commitments while also formulating a strategic future.
In testimony, Arul Kanda acknowledged that his initial interactions with the board occurred within days of joining. He insisted that Hazem’s resignation effectively ended Hazem’s capacity to lead the organization in the same way and that, as the new president, he could not rely on Hazem in the same capacity. He explained that he relied heavily on the 1MDB chief financial officer at the time, Azmi Tahir, to provide financial information and to guide him through the portfolio of arrangements that were already in motion. This admission is important because it framed the early days of Arul Kanda’s tenure as one in which he was navigating a complex machinery with limited internal leadership and a need to rely on the information and representations provided by others who had been at the wheel before him. His acknowledgment that he looked to the CFO for crucial financial details demonstrates the operational reality inside a boardroom where the lines between oversight and execution can become blurred when new leadership steps in amid a swirl of ongoing transactions, audits, and strategic reviews.
The testimony also touched on the broader legal action filed by 1MDB against Arul Kanda and the former Treasury secretary-general, Tan Sri Dr Mohd Irwan Serigar Abdullah, in May 2021. The suit asserts that they are liable for breaches of duties and trust, alleging losses to 1MDB amounting to US$1.83 billion related to investments in 1MDB-PetroSaudi Ltd. The case further alleges that Arul Kanda and Irwan conspired to misappropriate US$3.5 billion of 1MDB funds and transferred those sums to Aabar Investments PJS Ltd, a shell entity positioned as a subsidiary of IPIC (International Petroleum Investment Co). The subsequent payments to IPIC, totaling US$1.265 billion in May 2017, added to the gravity of the allegations. Arul Kanda’s defense has thus been framed within a broader contest over fiduciary duties, governance practices, and the proper stewardship of assets that were part of a larger web of international deals and cross-border financial arrangements. He argued that while he may have made errors in presenting information to the board or in responding to media inquiries, he was not acting alone and did not consciously misrepresent material facts; rather, he relied on colleagues and the governance structure in place at the time.
This backdrop helps explain why the January 12, 2015 board meeting became a flashpoint. The meeting occurred seven days after Arul Kanda’s formal appointment and focused on a facility arrangement that 1MDB had secured from Deutsche Bank for Brazen Sky Ltd, a vehicle tightly linked to the broader PetroSaudi project. The discussion at the board meeting included representations about the status and significance of the Deutsche Bank facility and how it related to the investment portfolio and redemption strategies that the organization was pursuing at the time. The board’s concern was whether the information presented to them accurately reflected the state of the company’s investments, the redemption status of certain assets, and the potential implications for liquidity and credit arrangements going forward. Arul Kanda acknowledged that the board was given information that, in his view, did not capture the full nuance of how some redemptions were executed or how certain transactions were structured. His testimony suggested a belief that some of this information should have been clearer to the board, and that more robust verification and documentation might have prevented misunderstandings or misperceptions about the true nature of the funds involved.
In explaining the decision to rely on colleagues rather than acting unilaterally, Arul Kanda highlighted a principle that is often cited in governance debates within complex financial organizations: the limitations placed on a new chief executive who inherits a network of interdependent agreements and a portfolio with significant leverage and redemption requirements. He stressed that as the president, he was not “acting on his own” and that decisions were anchored in the collaboration of senior officers who were already well-versed in the technicalities of the deals and the legal structures. The board, in his account, was entitled to rely on the information provided by the CFO and other senior executives who had direct oversight of the financial instruments and the redemption activities. This framing was used to justify how the initial communications to the board and the public were developed, particularly around the Deutsche Bank facility and the redemption of investments associated with Brazen Sky and its related entities. The thrust of the argument was that his leadership did not equate to unilateral control, but rather to steering a complex machine through governance processes that required coordination and reliance on the expertise of others who had been in the thick of the transactions before him.
Beyond the immediate governance concerns, the January 2015 period was marked by broader disputes about how 1MDB’s portfolio and its underlying transactions were perceived by the public, regulators, and other market participants. The court’s focus on whether Arul Kanda misrepresented the board or the public in the early days of his tenure underscores the ongoing tension between transparent disclosure and the operational confidentiality that sometimes surrounds large, multi-jurisdictional financial arrangements. In this sense, Arul Kanda’s testimony invites a closer examination of how leadership transitions are managed in institutions with complex, high-stakes portfolios, and how those transitions intersect with ongoing legal scrutiny and civil actions seeking to hold individuals and entities to account for alleged breaches of fiduciary duties, misappropriation, or improper conduct. The January 2015 timeframe thus functions as a critical reference point for understanding both the internal dynamic at 1MDB and the external legal and regulatory pressures that would come to shape the organization’s trajectory in the years that followed.
Brazen Sky and the Deutsche Bank facility: how the facility was framed and what happened to the redemption
A central element of Arul Kanda’s testimony and the accompanying court filings concerns Brazen Sky, the entity that functioned as a conduit in a web of transactions tied to 1MDB’s investment in PetroSaudi and related structures. Brazen Sky was described in earlier proceedings as having been established in the British Virgin Islands and used as a transit point in the broader strategy to repatriate funds tied to PetroSaudi Oil Services Ltd (PSOSL). The management of Brazen Sky, including its directors Azmi Tahir (the CFO at 1MDB) and Terence Geh Choh Heng, came under scrutiny as the case unfolded, with testimony detailing how the redemption flows and the corresponding cash movements were handled in the months leading up to and following Arul Kanda’s arrival at the helm.
According to Arul Kanda’s account, Azmi Tahir informed him that the redemptions of Brazen Sky investments had occurred in multiple phases and over a period that spanned late 2014 into early 2015. Specifically, Azmi explained that by November 5, 2014, a substantial portion—US$1.22 billion—had been redeemed in cash from the total US$2.318 billion that Brazen Sky investments represented. This initial cash redemption left a balance of approximately US$1.1 billion. Subsequently, a further redemption of roughly US$170 million occurred in cash, reducing the cash balance to about US$939 million. Arul Kanda testified that he understood at that time that the remaining US$939.874 million had been redeemed and was held as cash as of December 31, 2014. When he prepared his statement to the board on January 12, 2015, he maintained the view that the redemption of the US$939 million of Brazen Sky investments would also be in cash, mirroring the pattern of the earlier redemptions.
A critical and later-corroborated point in his testimony is that the interpretation of how the US$939 million had been redeemed subsequently changed. In March 2015, Arul Kanda learned from Azmi that the redemption of Brazen Sky’s investments to date did not occur via cash redemption but rather through a sale to Aabar PJS Ltd on January 2, 2015. This revelation—that the redemption had been accomplished through a sale rather than cash redemption—altered Arul Kanda’s understanding of the liquidity and the financing arrangements that the Deutsche Bank facility was intended to support. He explained that, prior to joining 1MDB, he had discussed with Deutsche Bank the possibility of repatriating the redemption proceeds. Deutsche Bank, however, reportedly indicated that it could not accommodate such a request given the negative regulatory and reputational considerations surrounding 1MDB’s portfolio at that time. This line of reasoning sheds light on why there may have been a discrepancy between what board members believed to be happening with the money and the actual mechanics of those redemptions as they were ultimately executed.
The Deutsche Bank facility itself—assessed in the context of Brazen Sky and 1MDB’s broader portfolio—was a focal point for questions about how the facility served as a means to redeem or restructure investments, and how the board and its executives narrated these moves to external stakeholders. Arul Kanda’s testimony suggested that the facility was presented to the board in a way that may have painted a different lightsome picture than the underlying execution of the redemptions, particularly if the true redemption mechanism involved a sale to an external party rather than a cash outlay. The revelation that the balance of US$939 million had been redeemed through a sale to Aabar PJS Ltd reframed the board’s understanding of liquidity and asset realization associated with Brazen Sky, and it underscored the importance of precise disclosure about the structure of these transactions. The subsequent documentation and briefing that followed—whether the board’s minutes, internal memos, or press statements—was impacted by this evolving interpretation of how the redemptions were achieved and what that meant for the fund’s portfolio and for Deutsche Bank’s exposure.
The Brazen Sky arrangement, including its management by Azmi and Geh and its ultimate disposition through a sale to Aabar PJS Ltd, has been central to the many disputes that followed. In Arul Kanda’s account, his initial understanding of the redemption as cash, and the later correction to a sale, signified a misalignment between what was perceived publicly and what had actually occurred in the private, transactional layer of the deals. This misalignment is at the heart of questions about due diligence, board oversight, and the duties owed by executives to investors, regulators, and the public. The interplay between Brazen Sky’s structure, the Deloitte Bank facility, and the eventual disposition of the US$939 million underlines how a single set of financial arrangements could become the fulcrum for broader allegations about misrepresentation and misappropriation when viewed through the lens of subsequent investigations and litigation.
In the January 13, 2015 press statement, Arul Kanda attempted to separate his personal accountability from the corporate communications function. He contended that the press release had been drafted by 1MDB’s corporate communications department and not authored by him personally, although it carried his signature. The press release announced that 1MDB had redeemed in full the US$2.318 billion invested in a Cayman Islands-registered fund, pointing to commitments made by the board chair in December 2014. This narrative, in Arul Kanda’s view, was thus a corporate statement rather than a personal declaration, even though it bore his sign-off. The tension between personal accountability and corporate messaging is notable because it speaks to the broader governance challenges faced by 1MDB during a period in which information was being transmitted to the public in rapid succession and under intense scrutiny from media, investors, and regulatory bodies. The episode also highlights the complexities of corporate communications in an environment where decisions were made within a network of entities and where the public perception of 1MDB’s financial health and strategic direction had significant implications for reputation and future funding.
This section’s discussion of Brazen Sky and the Deutsche Bank facility is essential for understanding how the January 2015 period served as a crucible for disclosure practices, the interpretation of redemptions, and the governance norms that guided 1MDB’s leadership. The evolving understanding of how redemptions were executed—initially believed to be cash-based, later revealed to be framed as a sale to a related party—exposed a gap between what executives believed and what was accurately disclosed both to the board and to the public. It also illustrates how the interaction between complex financial instruments, cross-border deals, and the management of high-profile investments can lead to disputes about fiduciary duties and the adequacy of oversight. The implications extend beyond the immediate players involved in Brazen Sky, touching on the larger issues of governance, accountability, and the integrity of financial disclosures in a transformative period for 1MDB.
Jan 12 board meeting and the January 13 press statement: representations and governance questions
The January 12, 2015 meeting of the 1MDB board—held only a week after Arul Kanda had been appointed—became a focal point for questions about how information was presented to the board and how the board’s oversight function was exercised in relation to the Deutsche Bank facility and Brazen Sky. During this session, Arul Kanda acknowledged that he may have conveyed or relied on representations that were not fully accurate in the context of the broader redemption narrative tied to the company’s investment portfolio. The central issue, in this description, was whether the board received a sufficiently precise and complete explanation of the Deutsche Bank facility’s purpose and the redemption status of the Brazen Sky investments. Arul Kanda accepted that there was a moment in which reliance on the oral representations of the CFO—Azmi Tahir—had occurred in lieu of written documentation that might have captured the full nuance of the investment portfolio and the status of outstanding redemptions. He described the practice at 1MDB as not requiring written documentation in every instance when responding to the board, a practice he accepted as part of the organizational culture at the time. He claimed that he never acted unilaterally and that his responses were grounded in the information available to him and the contributions of others who reported to him in varying capacities.
This admission—that the board’s understanding of the Brazen Sky arrangement and the Deutsche Bank facility might have depended heavily on oral representations, rather than on robust documentary records—raised questions about the adequacy of record-keeping and the governance controls that were in place during the transition period. The defense, framed through Arul Kanda’s testimony, suggested that the board’s concerns were addressed in the moment through dialogue and that the practice of not recording every response in board minutes did not imply concealment or misrepresentation but rather reflected a procedural tolerance for timely decision-making in a fast-moving financial environment. This distinction—between a reliance on oral communications and the need for formal documentation—became a key point in the discussions around the board’s governance standards and how the organization would work to strengthen transparency and accountability moving forward.
Linked to this are the broader implications for how the January 13, 2015 press statement was conceived and communicated. Arul Kanda’s defense posited that the press statement—a declaration that 1MDB had redeemed in full the US$2.318 billion invested in the Cayman Islands fund—was not a personal pronouncement but rather a corporate statement prepared by the corporate communications department and signed off by him. He argued that, despite his signature, the phrasing and content were, in his view, reflective of the board’s commitment and the organization’s official stance rather than a personal narrative. The statement highlighted the redemption of a large sum tied to the PetroSaudi-linked investment vehicle and invoked the December 23, 2014 statement by the board chair as a basis for 1MDB’s assertion of success in redeeming the investment. The exact language used, and the way it aligned with other disclosures, became a point of contention in the subsequent cross-examinations, as questions were raised about whether the statement properly represented the true nature of the redemption and whether the underlying transactions had been disclosed in full to the board and to the public.
In the broader governance context, the January 12 board meeting and the January 13 press statement underscore the critical intersection of leadership clarity, board oversight, and corporate communications in a complex, multi-jurisdictional financial enterprise. The board’s capacity to interrogate and verify the information presented to it—particularly on matters as consequential as a Deutsche Bank facility and a major redemption of investments—depends on a robust governance framework, transparent record-keeping, and a culture of accountability that prioritizes accuracy over expediency. Arul Kanda’s account of the discussions, the reliance on oral representations, and the role of the corporate communications department in the press release collectively highlight a cluster of governance questions about how 1MDB managed risk, disclosed material developments, and maintained investor confidence in a period of rapid change and intense scrutiny. The resulting narrative is one in which leadership transitions, the handling of complex transactions, and the transparency of disclosures are all central to assessing the integrity of the decision-making process and the ultimate outcomes of the financial arrangements under review.
In this section, the emphasis is on the governance mechanics and the friction points that emerged around representation, documentation, and disclosure. The January 12 and January 13 events illustrate how the interaction between the board, the chief executive, and the corporate communications function shaped public messaging and internal record-keeping. They also reveal how the interpretation of key financial moves—the redemption of the Brazen Sky investments and the status of funds wired or redirected through Deutsche Bank’s facility—could pivot on the specifics of whether transactions were framed as cash redemptions or asset sales. The narrative thus underscores a broader governance lesson: in a complex financial organization facing scrutiny and legal exposure, precise, documented, and verifiable information is critical to maintaining board trust, ensuring accountability, and safeguarding the organization’s credibility with regulators, investors, and the public. The January 12–13 episode thus became a microcosm of the governance challenges that 1MDB would confront in the years that followed, including questions about duties of care, dread of misrepresentation, and the overarching need for rigorous transparency in all material disclosures.
Pre-appointment meetings: Jho Low, Aabar, and the Abu Dhabi context
A recurring theme in Arul Kanda’s testimony concerns meetings that occurred before his formal recruitment by 1MDB, including discussions with key figures tied to the PetroSaudi deal and related entities. He confirmed that he had met Jho Low in Abu Dhabi prior to joining 1MDB on January 5, 2015. He also indicated that he had met Khadem al-Qubaisi, the chairman of Aabar, and Mohammed Badawy al Hussein, the CEO of Aabar, around the same period. These disclosures come within the broader narrative of how 1MDB’s relationships with Abu Dhabi-based entities and their associates intersected with the fund’s investment strategies and cross-border transactions. Arul Kanda’s disclosures about these meetings serve to illuminate the network of connections that shaped the decisions in the lead-up to his appointment and the early months of his tenure. The context in which these discussions occurred—an Abu Dhabi financial and investment landscape characterized by state-linked institutions and high-profile investors—offers a backdrop to the complexity of the arrangements that would later come under intense scrutiny.
In this part of the testimony, Arul Kanda described his professional status in Abu Dhabi prior to joining 1MDB, including his tenure at a bank based in the city. His remarks suggest that his pre-1MDB experiences and the proximity to Abu Dhabi’s financial hub influenced his exposure to large, cross-border deals and the kinds of considerations that would become central to 1MDB’s strategy and governance. The narrative presents a picture of a professional who, upon moving to 1MDB, brought to bear a pre-existing network and a familiarity with the region where PetroSaudi and related entities had established connections. The meetings with Jho Low, al-Qubaisi, and al Hussein are framed as part of the pre-hire landscape that would shape how 1MDB’s leadership understood and engaged with potential investment vehicles, asset structures, and strategic partnerships in ways that would later be subject to intense examination and legal scrutiny. The pre-appointment interactions thus appear to be a critical element in the overarching story of how 1MDB’s governance and risk management would evolve under Arul Kanda’s watch.
The Department of Justice’s (DOJ) 2017 reports, referenced in the proceedings, pointed to allegations that 1MDB funds were siphoned off to Jho Low, al-Qubaisi, and other notorious figures often referred to in connection with the so-called MO1 group, including Najib Razak, his wife Rosmah Mansor, her son, and Riza Aziz, as well as Jho Low’s associate Eric Tan Kim Loong. Arul Kanda acknowledged these DOJ accounts in the context of the broader case, though he did not conflate those allegations with direct knowledge of the specifics of each transfer. The DOJ’s portrayal of funds moving through a network of people and entities added a layer of context to the complexity of 1MDB’s financial flows and the perception of impropriety that would become a central issue in the litigation and regulatory actions that followed. The Abu Dhabi connections described in Arul Kanda’s testimony thus sit within a wider international narrative about how the fund’s assets were positioned, who the beneficiaries or intermediaries were, and how those relationships influenced strategic decisions, investment appetite, and post-facto explanations to regulators and the public.
The Abu Dhabi context is particularly important because it ties together several strands of the 1MDB saga: the involvement of Aabar’s leadership, the role of Khadem al-Qubaisi, and the broader set of cross-border financial arrangements that involved asset transfers, potential collateral, and the use of shell companies to move funds. Arul Kanda’s statements about meeting Jho Low and other Abu Dhabi-based figures prior to his formal appointment underscore how early relationships and informal discussions can shape the understanding and expectations of a new leader in a complex financial enterprise. The pre-appointment meetings served as a window into the network of actors and interests that surrounded 1MDB at a critical juncture, a period when the organization’s governance, disclosures, and risk management practices would soon be tested in courtrooms and regulatory inquiries around the world. The Abu Dhabi nexus remains a central piece of the overarching narrative, illustrating how cross-border connections can complicate oversight and how the posture of leadership toward those connections can influence the trajectory of a fund under intense public and regulatory scrutiny.
In addition to pre-appointment interactions, the testimony references the broader narrative in U.S. Department of Justice materials and investigations that connected 1MDB’s funds with a set of prominent individuals, including MO1 and others associated with Najib Razak. Arul Kanda’s engagement with these materials—without asserting direct control over the DOJ’s findings—demonstrates how the testimony balances discussing known personal interactions with the broader, more controversial claims about fund flows and alleged misappropriations attributed to the MO1 group. The cross-border dimension of these allegations—spanning Malaysia, Abu Dhabi, Switzerland, and other jurisdictions—illustrates the scope and complexity of 1MDB’s financial architecture, and it clarifies why the early period of Arul Kanda’s leadership would be of particular interest to courts and investigators attempting to reconstruct the sequence of events and identify where misrepresentations may have occurred or where fiduciary duties may have been breached.
The 2021 lawsuit, counterclaims, and the scope of the allegations
1MDB’s legal action against Arul Kanda Kandasamy and Tan Sri Dr Mohd Irwan Serigar Abdullah—the former Treasury secretary-general who also served as 1MDB’s chairman of the board of advisers—was filed in May 2021. The suit alleged breaches of duties and trust by these individuals, asserting that their conduct led to losses estimated at US$1.83 billion in connection with 1MDB’s investment in 1MDB-PetroSaudi Ltd. The law school-style framing of the case emphasizes fiduciary duties, the standard of care expected of senior executives and board-level officials, and the consequences of any deviation from those duties. In addition to the breach-of-duties allegations, the suit asserted conspiracy and misappropriation claims involving substantial sums of 1MDB money paid to Aabar Investments PJS Ltd, a shell entity that masqueraded as a subsidiary of IPIC, and a subsequent payment to IPIC in May 2017 amounting to US$1.265 billion. The core allegations thus center on a complex chain of transfers and the alleged misallocation or misdirection of funds that were supposed to be deployed for strategic investments and development projects rather than diverted through a conduit of shell entities.
1MDB’s complaint also claimed that Irwan Serigar conspired with Arul Kanda to secure an employment extension agreement that resulted in a RM2.91 million payment to Arul Kanda. The scale and nature of these payments, if proven, would be a critical element of the litigation’s financial, governance, and ethical dimensions. Arul Kanda responded with a counterclaim seeking the return of payments and bonuses to which he claimed entitlement upon his removal from 1MDB in 2018, following Pakatan Harapan’s victory in the May 2018 general election. The counterclaim frames itself as a claim of rightful compensation under terms established during his tenure, a matter that intersects with the broader debate about severance, incentive structures, and the legal rights of executives who find themselves exiting in the context of upheaval and political change.
The lawsuit’s orbit includes allegations regarding Brazen Sky and its transformation through the portfolio of investments culminating in the creation of Brazen Sky and then the Bridge Global Fund, with the suggestion that the fund’s consequences and structure were instrumental to the alleged loss of value for 1MDB. The timeline tracks the development from 1MDB’s investments in PetroSaudi through various reorganizations into Brazen Sky and then to Bridge Global Fund, highlighting the alleged misalignment between these moves and the fiduciary duties owed to 1MDB as a corporate entity with a broad public stake. The case also involves the broader context of cross-border financial arrangements and the interwoven relationships with entities such as Aabar, IPIC, and PSOSL. The court proceedings thus pivot on intricate questions about the legality, legitimacy, and propriety of these arrangements, and whether the executives involved acted in the best interests of 1MDB or in ways that improperly benefited parties connected to the network of entities and individuals connected to the deal.
A separate layer of the case involves the DOJ’s public accounts and the references in 2017 reports that traced certain 1MDB funds to Jho Low and to other associates, including Najib Razak’s circle, Rosmah Mansor, Riza Aziz, and Eric Tan Kim Loong. Arul Kanda acknowledged the DOJ reports in the sense that they reflected allegations that the DOJ had traced flows of funds through the network of people around 1MDB. He indicated that he did not claim personal knowledge of every transaction or transfer but recognized the existence of a documented pattern in which funds were linked to individuals who had been publicly associated with 1MDB’s broader operations. This acknowledgement underscores the international dimension of the case, in which multiple jurisdictions and legal regimes are involved in the analysis of how funds were moved and who benefited from those movements. The DOJ’s documentation provided a backdrop for the courtroom narrative, and Arul Kanda’s responses sought to distinguish his personal knowledge from the larger, externally reported allegations.
Additionally, the case featured Arul Kanda’s opening up about past interviews and media engagements, including his admission that he had made certain errors during an interview with Business Times Singapore in February 2015. He claimed he did not write to the Singaporean outlet to correct those errors, which opened an avenue for questions about how promptly and effectively information was corrected in the media, and what the implications might be for public understanding of 1MDB’s operations. The litigation thus captured not only the technical questions about fiduciary duties and misappropriation but also the reputational and societal dimensions of how 1MDB’s narrative was conveyed to the public, the speed with which corrections could be implemented, and the responsibility of executives to ensure that statements in the media matched the underlying facts of the organization’s financial arrangements.
This section’s outline emphasizes how the 1MDB suit against Arul Kanda and Irwan Serigar intersects with broader allegations about misappropriation, fiduciary breaches, and governance failures. It also highlights how Arul Kanda’s counterclaims framed his own position and sought to reclaim compensation tied to his tenure’s termination. The ongoing trial, which continued on the specified date, underscored the legal and financial stakes involved in these proceedings and reflected the enduring complexity of 1MDB’s asset structure, its multi-jurisdictional footprint, and the legal questions about accountability for those responsible for steering the fund through turbulent times.
Testimony on supervision, record-keeping, and board communications
A key thread in Arul Kanda’s testimony centered on the degree to which he supervised the organization’s governance processes and the level of oversight he exercised—or, as he argued, did not need to exercise—over particular personnel and transactions. The cross-examination by 1MDB’s counsel, Datuk Lim Chee Wee, raised pointed questions about whether Arul Kanda had failed to supervise Azmi Tahir adequately and whether he had adequately briefed the board on January 12, 2015 about matters arising from Brazen Sky that were of “grave concern,” especially regarding the Deutsche Bank facility and the redemption portfolio.
Arul Kanda replied that there was no reason to suspect wrongdoing by Azmi Tahir, suggesting that he relied on the CFO for financial information rather than having direct evidence of misfeasance or mismanagement. He stated that the practice in 1MDB did not require all information to be captured in written board minutes when responding to inquiries, and that he was never acting alone in making those decisions. This response points to a broader debate about governance practices in large organizations and how important it is for senior leadership to document material decisions, to ensure that board members have an auditable trail, and to avoid miscommunication or misinterpretation of the rationale behind key transactions.
Lim’s questions also probed whether Arul Kanda had briefed the board on the investment portfolio of US$939 million tied to the Deutsche Bank facility and Brazen Sky. Arul Kanda admitted that he had not ensured a written record of some of those deliberations, which he acknowledged might be interpreted as a departure from best governance practice, even if he believed that a verbal briefing was sufficient and consistent with the internal norms of the period. The exchange signaled a central tension: the balance between rapid decision-making in a high-stakes financial environment and the need for a robust, documented, auditable governance framework that can withstand intense scrutiny in the event of litigation.
The testimony also touched on the mechanics of how Arul Kanda prepared his own statements and how the January 13 press release came to be. He underscored that the press release reflected 1MDB’s official stance as articulated by the corporate communications unit, rather than a personal position. While he signed the statement, he insisted that it did not reflect a personal assertion of fact but rather a formal 1MDB communication, a distinction he argued would limit personal accountability for the content of the release. This aspect of the testimony highlighted the interplay between leadership, communications, and governance. It raises in sharper relief the ongoing debate about who owns the responsibility for public disclosures, how sign-offs should function in corporate contexts, and how to ensure that press statements accurately reflect the underlying facts of the transactions and their legal implications.
The broader governance implications of these questions are profound. If board minutes and written documentation are less precise, there is a greater risk of ambiguity about what the board was told, what it approved, and why certain decisions were pursued. Such ambiguity can complicate post hoc analyses by investigators and courts and may contribute to perceptions of misrepresentation or mismanagement, even when the underlying intentions were to manage a challenging portfolio and to respond to exigent financial pressures. Arul Kanda’s testimony thus offers a window into the governance culture at 1MDB during a period of rapid change and intense external scrutiny. It also underscores why, in the years that followed, there would be ongoing emphasis on tightening governance controls, strengthening board oversight, and ensuring that all material transactions and the rationale for those transactions are documented comprehensively for audit and regulatory review.
In sum, Arul Kanda’s cross-examination on supervision and record-keeping reveals a nuanced and multifaceted governance landscape. It shows how the interplay between executive leadership, financial officers, and the board can become a flashpoint for questions about accountability, transparency, and the sufficiency of documentation in justifying major decisions. The questions about whether the board was properly briefed and whether the information was sufficiently captured in minutes highlight the importance of robust governance mechanisms in organizations with intricate cross-border investments and layered corporate structures. The ongoing legal actions, the DOJ references, and the broader allegations all add weight to the need for stringent governance reforms, enhanced transparency, and a more rigorous approach to risk management in such a high-profile, high-stakes environment.
DoJ references, MO1, and the broader international dimension
The DoJ’s public materials and the 2017 reports introduced an international dimension to the 1MDB saga that extended beyond Malaysia’s borders and into the domains of the United States and other jurisdictions. The DoJ materials described a complex web of fund movements, with claims that 1MDB funds were siphoned off to Jho Low, Khadem al-Qubaisi, and other associates connected to the MO1, Najib Razak, Rosmah Mansor, Riza Aziz, and Eric Tan Kim Loong. Arul Kanda acknowledged the existence of these DOJ accounts and allegations and stated that while the DOJ reports reflected concerns about fund flows and potential misappropriation, he did not claim direct knowledge of every transaction. His acknowledgement signals the intersection of a national case with an international investigative framework, illustrating how the 1MDB story unfolded across borders and how the U.S. legal system contributed to the broader public understanding of the fund’s financial trajectory.
This global dimension added to the complexity of the case and reinforced the perception that 1MDB’s governance and financial reporting were inadequate by the standards of international scrutiny. The DOJ’s portrayal of fund movements into the hands of individuals associated with Najib Razak and his circle raised questions about accountability at the highest levels of government and within the management of publicly sensitive assets. Arul Kanda’s response—that he did not personally verify every claim in the DOJ materials—reflects the challenge facing any executive asked to navigate allegations that touch on a broad ecosystem of persons and entities across multiple jurisdictions. The DOJ’s materials thus served as an important backdrop to the courtroom narratives, shaping how jurists, counsel, and witnesses framed the legal implications of the alleged misappropriations and misrepresentations within the 1MDB framework. The international dimension underscores the fact that 1MDB’s assets and deals did not remain contained within a single national boundary; instead, they intersected with global financial networks, which amplified the stakes of governance, disclosure, and accountability in the eyes of regulators and the public.
The references to DOJ findings and the emphasis on MO1-connected individuals—while not equating Arul Kanda or Irwan Serigar with direct knowledge of every transaction—help illuminate how the case was perceived in the international arena. It also highlights the risk that misperceptions could be created by incomplete or misaligned disclosures, particularly where complex fund flows were involved. The broad pattern of allegations around the movement of funds, the roles played by Jho Low, al-Qubaisi, and related associates, and the subsequent legal actions in multiple jurisdictions all contribute to the sense that the 1MDB story is one of intricate financial engineering, governance failures, and a sprawling footprint across borders. The DoJ’s involvement reinforced the idea that accountability was not confined to the jurisdiction in which 1MDB operated; it was a matter of international concern that required careful, transparent, and thorough documentation of the events surrounding these transactions.
The 1MDB lawsuit, the counterclaims, and the trial trajectory
The ongoing lawsuit brought by 1MDB against Arul Kanda and Irwan Serigar, as well as Arul Kanda’s counterclaims, has been a central thread in this narrative. The court case centers on allegations that the two defendants breached duties and trust, leading to losses for 1MDB in relation to its investment in 1MDB-PetroSaudi Ltd, a structure that subsequently evolved into a complex chain involving Brazen Sky and, later, Bridge Global Fund. The plaintiff also claims that Arul Kanda and Irwan engaged in a conspiracy that enabled misappropriation of US$3.5 billion, with funds diverted to Aabar Investments PJS Ltd and then forwarded to IPIC (International Petroleum Investment Co). The inclusion of a claim that Irwan conspired with Arul Kanda to enable an employment extension agreement that yielded a RM2.91 million payment to Arul Kanda adds a personal dimension to the broader financial dispute, illustrating how executive compensation practices can become entangled in disputes over governance, control, and accountability.
In response, Arul Kanda mounted a counterclaim seeking the return of payments and bonuses to which he contends he was entitled when his tenure ended in 2018. This line of argument underscores the interplay between litigation-driven assertions and the contractual or policy-based rights that executives might claim under employment and compensation terms. The trial progressed in a setting presided over by judge Datuk Raja Ahmad Mohzanuddin Raja Mohzan, with the proceedings continuing on the designated date. The case’s trajectory is shaped by a mixture of expert testimony, documentary evidence, and the cross-examination of witnesses who bring stepwise revelations about the structure of the deals, the decision-making processes, and the roles played by various actors in the network of entities connected to 1MDB’s portfolio. The cross-border and cross-institutional dimensions of the case keep it in the international spotlight as it unfolds, given the high-profile nature of the allegations and the reputational significance of 1MDB for the Malaysian government and its international partners.
This section also highlights that Arul Kanda’s testimony touched on how he viewed the allegations and his own role in the events leading up to 2018, including his interpretation of the events that had triggered investigations and litigation. He acknowledged some errors in earlier statements, including the interview with Business Times Singapore in February 2015, and explained how he had responded to those errors and corrected misunderstandings when appropriate. The trial process thus embodies the broader struggle to achieve accountability for a set of actions that involve complex financial structures, multiple corporate entities, and a broad cast of key players who have been implicated in varying degrees of involvement. The legal action is not only about the specific transactions but also about whether the corporate governance framework, executive oversight, and the culture of disclosure at 1MDB were adequate to safeguard the fund’s assets and the public’s interests.
The case’s broader implications extend into governance reforms and the ongoing conversation about how large public funds should be managed in an era of extensive cross-border investment and scrutiny. The litigation provides a long-running test of the norms and expectations for the fiduciary duties of executives and directors handling state-linked assets, and it emphasizes the importance of clear, verifiable, and timely disclosures to avoid misperceptions that could lead to misrepresentation claims or allegations of wrongdoing. It also reinforces the need for robust internal controls, independent oversight, and rigorous documentation of transactions, especially those involving complex vehicles such as Brazen Sky and the Bridge Global Fund. The trial’s progress and its outcomes could have lasting implications for how sovereign wealth and state-owned investment vehicles operate in a global financial system, shaping governance frameworks and statutory requirements in Malaysia and beyond.
Testimony nuance: statements about Azmi Tahir, minutes, and the board’s information flow
A substantial portion of Arul Kanda’s testimony focused on the relationship with Azmi Tahir, the then-chief financial officer, and how his briefing to the board was conducted, including whether crucial information was properly recorded in board minutes. The counsel pressed him on whether there was a reasonable basis to suspect any wrongdoing by Azmi and whether the board was sufficiently informed about matters arising from Brazen Sky that might be considered “grave concerns.” Arul Kanda acknowledged that there was a need to reflect more comprehensively the full scope of Baut or Brazen Sky’s redemptions and the Deutsche Bank facility within the board’s records. He agreed that his briefing was not always accompanied by formal minutes capturing every important detail, which he described as a practice at 1MDB at the time. This admission underscores a potential governance gap: if the board’s understanding of a critical financial arrangement is built substantially on oral representations and verbal updates, the risk of misinterpretation and miscommunication grows. The absence of written documentation can hamper post hoc investigations and complicate the defense against accusations of misrepresentation or insufficient oversight.
Arul Kanda argued that his statements and actions reflected the leadership’s collective responsibility rather than a unilateral action. He asserted that he never acted alone in making decisions, emphasizing that he drew on the expertise and input of the CFO and other senior executives to guide policy and practice. The cross-examination also explored whether, in January 2015, he briefed the board about the US$939 million position tied to the Deutsche Bank facility and Brazen Sky. While he admitted that the board was informed, he contended that the absence of minutes did not automatically imply wrongdoing but rather highlighted the practical realities of managing complex discussions in a high-pressure environment. This line of argument is meant to reinforce the claim that the governance process functioned within a reasonable framework, even if it did not align with the current standard of meticulous written record-keeping.
The examination also addressed Arul Kanda’s contemporaneous statements about the Brazen Sky redemptions and how his early interpretations were later revised in light of new information from Azmi Tahir. The evolution of his understanding—from cash redemptions to a sale to Aabar—illustrates how real-time developments could outpace the documentation that would be needed to support the board’s decisions and public communications. The discussion underscores the overarching governance challenge of maintaining consistent internal and external narratives as new information comes to light and as the true mechanics of complex financial transactions become clearer over time. The tension between the speed of business decisions and the thoroughness of record-keeping remains a central theme in the portrayal of Arul Kanda’s leadership, raising questions about how to build more robust governance practices that can withstand the test of legal review, regulatory scrutiny, and public accountability in a cross-border financial environment.
The testimony in this segment thus contributes to a more nuanced picture of how Arul Kanda’s leadership was perceived by the board and by investigators. It reinforces the idea that governance in large, multi-entity investment operations is not merely about what decisions were made, but also about how those decisions were communicated, documented, and defended in the face of changing information and evolving understandings of the underlying asset structures. The interplay between oral briefings, the role of Azmi Tahir as CFO, and the board’s access to comprehensive, formal records remains a critical factor in assessing whether the governance framework of 1MDB at the time met the standards expected for safeguarding assets, ensuring transparency, and upholding fiduciary duties. As this section shows, the complexity of the Brazen Sky arrangements and the Deutsche Bank facility created a scenario in which governance and compliance were tested across multiple dimensions, and where the reliability of information to the board became a central question for the court and for public scrutiny.
Media statements, personal admissions, and corrections: the communication challenge
In addition to the more technical governance questions, Arul Kanda’s testimony touched on his public communications and the issue of correcting earlier misstatements in the media. He admitted that he had made errors in an interview with Business Times Singapore in February 2015 and acknowledged that he did not mail a correction or clarification to the Singapore publication to rectify those mistakes. This admission highlights the personal accountability question in public messaging: to what extent can an executive be held responsible for media representations that are inaccurate or incomplete, and what role should the leadership play in ensuring that the public record accurately reflects the facts? The fact that the interview in question predated Arul Kanda’s January 12 board briefing and the January 13 press statement adds a layer of complexity to the narrative. It raises questions about the consistency of the information that was circulating publicly about 1MDB’s investments, redemptions, and the progress of ongoing deals.
Moreover, Arul Kanda’s defense regarding the January 13 press statement—arguing that the statement was authored by 1MDB’s corporate communications team and not personally drafted by him—illustrates the tension between personal accountability and corporate responsibility. While he signed the press release, he claimed that the content should be viewed as an official 1MDB communique rather than a personal statement. This distinction matters in the context of the case because it bears on whether he can be held personally liable for statements that may have misrepresented the state of 1MDB’s investments. The press release claimed that 1MDB had redeemed in full the US$2.318 billion invested in the Cayman Islands fund, which, if based on a flawed or incomplete narrative, would have contributed to an inaccurate portrayal of the fund’s liquidity and the status of its major investments. The timing and content of this press release—placed at a moment when Azmi Tahir’s later clarification revealed a different mechanism for redemption (sale to Aabar) than what was previously understood—illustrate how the communications around these complex transactions could influence the public’s perception of 1MDB’s financial health and governance.
The broader takeaway from these admissions is the critical importance of precise, verifiable communications in high-profile financial disputes. The intersection of media statements, corporate communications protocols, and the formal board-level disclosures is an area where governance gaps can have outsized consequences. While Arul Kanda framed his statements as being consistent with corporate communications practice at the time, the content’s factual accuracy remains central to the court’s assessment of whether misrepresentations occurred and whether such misrepresentations caused losses or harm to 1MDB. The case underscores the continuing need for clarity and accountability in corporate communications, especially in organizations engaged in cross-border financial arrangements with significant political and reputational sensitivity. It also highlights the potential tension between rapid public disclosures and the necessity for thorough due diligence and verification prior to making statements that could shape investor expectations or regulatory interpretations.
Conclusion
The testimony and court proceedings surrounding Arul Kanda Kandasamy’s tenure at 1MDB illuminate a period of intense scrutiny, complexity, and controversy around governance, fiduciary duties, and the handling of multi-jurisdictional financial instruments. Arul Kanda’s admissions—ranging from potential misrepresentation to reliance on others in the wake of a leadership transition—reflect the challenges faced by executives in navigating a portfolio that included intricate structures such as Brazen Sky, investments linked to PetroSaudi, and the cross-border movements that prompted DOJ inquiries and international attention. The dialogue about the Deutsche Bank facility, the redemption mechanisms, and the ultimate disposition of assets through sales to entities like Aabar PJS Ltd highlighted the divergence between how events were presented to the board and the public and the technical realities underlying those transactions.
The lawsuit and counterclaims filed in 2021 brought these issues into sharp relief, forcing a formal examination of breaches of duties and trust, misappropriation claims, and the personal financial interests at stake for key executives. The ongoing litigation and the DoJ’s reference to MO1 and its associated figures emphasize that the 1MDB saga is more than a single set of transactions; it is a sprawling, multi-jurisdictional narrative that has redefined accountability norms for government-linked financial enterprises and elevated the importance of robust governance, documentation, and transparent disclosures. Arul Kanda’s testimony—along with the surrounding testimony about Azmi Tahir, Jho Low, Khadem al-Qubaisi, and other figures—offers a granular view of how leadership transitions, internal controls, and communications can interact in ways that either bolster or erode trust in institutions tasked with stewarding public wealth.
As the case continues, the court is tasked with disentangling a matrix of legal claims that revolve around fiduciary duties, misappropriation, and the integrity of financial reporting. The implications extend beyond 1MDB, serving as a touchstone for how large, state-linked investment funds manage risk, ensure accountability, and maintain public confidence in the face of complex financial engineering and cross-border investigations. The lessons emphasized by this narrative are clear: the strength of governance hinges on precise, verifiable information; the fidelity of public communications to the actual facts; and the steadfast commitment to transparent, accountable leadership that keeps the best interests of the fund and its stakeholders at the forefront. The ongoing proceedings will continue to shape how future boards, executives, and regulators approach governance in similarly complex, high-stakes financial ecosystems.