Kuala Lumpur: Arul Kanda Kandasamy, the former CEO of 1Malaysia Development Berhad (1MDB), testified in the High Court today that he did not ask why the company’s two auditors were terminated. 1MDB’s auditors, Ernst and Young (EY) and KPMG, were dismissed in 2010 and 2013, respectively. Arul Kanda clarified that he did not inquire about the matter because he only joined the sovereign wealth fund in 2015.

According to BERNAMA News Agency, the first defendant was responding to a question from 1MDB’s counsel, Datuk Lim Chee Wee, during the hearing of the USD6.59 billion lawsuit against him and former chairman of the board Tan Sri Mohd Irwan Serigar Abdullah. Lim asked Arul Kanda if he engaged with the stakeholders of the former auditors to understand why they resigned or were terminated, to which Arul Kanda replied, “No.”

When questioned by Judge Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan about whether he had seen reports containing negative audit findings from KPMG, Arul Kanda responded that he did not know if such reports existed.

In May 2021, 1MDB filed a lawsuit against Arul Kanda and Mohd Irwan, accusing them of breach of trust and conspiracy, leading to losses of USD1.83 billion related to the company’s investment in 1MDB-Petrosaudi Ltd. This investment was later converted into the Brazen Sky Limited investment, purportedly recoverable from the Bridge Global Fund.

1MDB further alleged that both defendants committed breach of trust and conspiracy by misappropriating USD3.5 billion in company funds paid to Aabar Investments and USD1.265 billion paid to International Petroleum Investment Company on May 9, 2017. The company also claimed that Mohd Irwan conspired with Arul Kanda to extend his employment agreement, resulting in a payment of RM2,905,200 to Arul Kanda, disregarding the company’s interests and leading to financial losses.

Consequently, 1MDB is seeking USD6.59 billion in damages from both defendants and an additional RM2.9 million from Mohd Irwan concerning the employment agreement extension. The hearing is set to resume tomorrow.