1MDB suit: Arul Kanda files RM56.7mil counterclaim over wrongful termination

KUALA LUMPUR: Former president and chief executive officer of 1Malaysia Development Berhad (1MDB), Arul Kanda Kandasamy (pic), has filed a counterclaim of RM56.7mil for alleged wrongful termination of his contract.

Arul Kanda, as the first defendant in a lawsuit brought by 1MDB, filed the counterclaim in the High Court here on Nov 17 through Messrs Sanjay Mohan.

Based on documents obtained by the media, Arul Kanda is seeking from the company RM202,600 for loss of income, bonus of RM2.5mil, special damages of RM54mil (loss of income from June 2019 to 2036) in addition to general, exemplary and aggravated damages.

ALSO READ: Arul Kanda, Mohd Irwan fail in bid to strike out 1MDB’s US$6.9bil suit

According to Arul Kanda, his employment contract had ended on Dec 31, 2017, but after discussions were held, the 1MDB board agreed to extend it and a new agreement was signed on Feb 23, 2018.

He claimed that according to the extended employment agreement, 1MDB had agreed to pay him a monthly salary of RM101,300 until June 30, 2018, and an ex-gratia bonus of RM2.5mil, in addition to his salary for January to April 2018 amounting to RM405,200.

However, he claimed that the then Finance Minister Lim Guan Eng had made various allegations including stating that the former CEO was dishonest and untrustworthy in an article published by a news portal on May 24, 2018.

Arul Kanda claimed that on June 25, 2018, 1MDB wrongfully terminated his contract without any basis and without any investigation to conclude that he had acted against the company’s interests.

The former 1MDB CEO also alleged that the termination of his contract was done without any evidence of wrongdoing to avoid the company from making salary payments for May and June 2018 amounting to RM202,600 and the remaining ex-gratia bonus of RM2.5mil.

In addition, Arul Kanda also filed an application to amend his defence statement in the suit filed by 1MDB, and the case management is set for Dec 4.

ALSO READ: Arul Kanda, Mohd Irwan cannot be liable for 1MDB’s losses, court hears

In May 2021, 1MDB filed a lawsuit against Arul Kanda and former 1MDB chairman Tan Sri Mohd Irwan Serigar Abdullah over alleged breach of trust and conspiracy causing 1MDB to incur losses of US$1.83bil in connection with its investment in 1MDB-Petrosaudi Ltd, which was converted into an investment in Brazen Sky Limited, purportedly held in the Bridge Global Fund.

1MDB also claimed that Arul Kanda and Mohd Irwan committed breach of trust and conspiracy by misappropriating 1MDB funds amounting to US$3.5bil paid to Aabar Investments and US$1.265bil billion paid to the International Petroleum Investment Company (IPIC) on May 9, 2017.

ALSO READ: Judicial commissioner recuses herself from 1MDB suit against Irwan Serigar, Arul Kanda

According to 1MDB, Mohd Irwan also conspired with Arul Kanda to cause the company to enter into the Employment Extension Agreement and make payments totaling RM2,905,200 to Arul Kanda in line with the agreement, disregarding 1MDB’s interests, resulting in losses to the company.

On Aug 23, the High Court here dismissed Arul Kanda and Mohd Irwan Serigar’s bid to strike out the US$6.59bil lawsuit filed by 1MDB against them. – Bernama