SIARAN MEDIA / MEDIA RELEASE

KEMENTERIAN KEWANGAN MALAYSIA

MINISTRY OF FINANCE MALAYSIA

Meetings with (i) Board of Directors of 1MDB and (ii) Arul Kanda

Together with the three Deputy Treasurer-Generals, Datuk Siti Zauyah Md Desa,
Datuk Ahmad Badri Mohd Zahir and Datuk Asri Hamidon, I had 2 meetings with
regards to 1MDB this afternoon.

The first meeting was with the Board of Directors, Dato’ Norazman Ayob and Dato’
Kamal Mohd Ali. The second was with the President of 1MDB, Arul Kanda, who
were accompanied by the former Chief Financial Officer (CFO), Azmi Tahir and the
former General Counsel, Ivan Chen.

The purpose of the meetings was to determine the financial status of 1MDB,
especially with regards to its ability to repay and service its debt obligations.

The Directors of 1MDB confirmed that 1MDB was “insolvent” and was unable to
repay its debts. The former CFO, Azmi Tahir has also written to MoF in March 2018
to state that 1MDB will not able to service its interest due in April and May 2018.

However, Arul Kanda when asked, highlighted that he is on “garden leave” until the
end of his contract in June 2018. Therefore, he claimed that he is in the dark as to
the financial situation of the company.

I then asked the Board of Directors as to what had happened to the US$940 million
worth of investment “units” previously held with BSI Bank, Singapore as well as the
US$1.56 billion worth of overseas investment funds belonging to 1MDB Global
Investments Limited. Together, these investments are worth purportedly some
RM9.8 billion, which if redeemed, would be more than sufficient to meet 1MDB’s
financial obligations for the next few years.

The Board of Directors, who would be supplying the Ministry with the 1MDB board
meeting minutes, claimed that they have repeatedly disputed the value and even
the existence of these investments during the monthly board meetings. This is
because the 1MDB management has repeatedly failed to supply the board with any
evidence over the existence of these investments over the past 2 years. Dato’
Kamal Mohd Ali called these 1MDB investments “a scam”.

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Kementerian Kewangan Malaysia, Kompleks Kementerian Kewangan

No. 5 Persiaran Perdana, Presint 2, Pusat Pentadbiran Kerajaan Persekutuan, 62592 WP Putrajaya
Tel: 03-8000 8000 Fax: 03-8882 3893 / 03-8882 3894 Emel: pro@treasury.gov.my
Separately, Azmi Tahir responded that these “investments” existed even though
BSI Bank was wound up. He gave the unbelievable excuse that the fund managers
refused to communicate with 1MDB in writing because of the on-going
investigations by the United States Department of Justice.

Arul Kanda on the other hand, claimed that all financial matters were handled strictly
by the company CFO, and he is absolutely uncertain as to what the value of these
‘investments’ are, or whether they even exist in the first place.

It is completely unbelievable that a highly paid and ‘experienced’ investment banker

can be so irresponsibly clueless as to not know whether RM9.8 billion worth of
investments are even real.

Arul Kanda’s response was utterly shocking and preposterous because prior to the
change of government, he toured the country preaching the financial viability of
1MDB and the soundness of its investments. In fact, Arul is today singing a
completely different tune from the songs he sang to the Public Accounts Committee
as recorded in the Hansard.

I have found Arul Kanda to be utterly dishonest and untrustworthy, and instructed
the legal advisers to the Ministry of Finance to review his position as the President
of 1MDB.

I have instructed that the Ministry of Finance take steps to appoint PwC to conduct
a special position audit and review of 1MDB so that Malaysians would know the
true financial state of affairs in 1MDB. We would then be able to determine the cost
of the shenanigans to the tax-payers. We will submit the PwC Report to the 1MDB
Special Committee set up by the Prime Minister once it is completed.

YB Lim Guan Eng

Menteri Kewangan
Putrajaya
22 Mei 2018

_______________________________________________________________________________________

Kementerian Kewangan Malaysia, Kompleks Kementerian Kewangan

No. 5 Persiaran Perdana, Presint 2, Pusat Pentadbiran Kerajaan Persekutuan, 62592 WP Putrajaya
Tel: 03-8000 8000 Fax: 03-8882 3893 / 03-8882 3894 Emel: pro@treasury.gov.my