1MDB chief counters fraud allegations nationwide ahead of polls

Malaysian state fund head Arul attempts to counter fraud allegations ahead of polls

1Malaysia Development Berhad (1MDB) chief Arul Kanda is not contesting the general election.

But in the past six weeks, he has appeared before nearly 30,000 people, traversing the country in the run-up to the May 9 polls in a bid to counter allegations of fraud in the state investment fund.

The nationwide roadshow - 25 stops and a dozen more to go - reflects growing concern over the impact of the 1MDB scandal, and flies in the face of observers' views that the complex dealings of the firm, which once raked up to RM51 billion (S$17.3 billion) in debt, were beyond the understanding of rural Malaysia.

Mr Arul told The Straits Times yesterday he was grilled for over two hours by different audiences in remote outposts like Benta, in Pahang, and Pasir Puteh, in Kelantan.

"You'd be surprised. 'Pakciks and makciks' , in religious skullcaps and headscarves, asking: 'Can the company actually repay its debts, where are sources of money coming from?'," he said (pakciks and makciks is Malay for uncles and aunties).

"Which shows quite a deep understanding. And if they're not satisfied they typically ask a followup question, so there was nowhere to run."

These rural and largely Malay areas are the bedrock of the ruling Barisan Nasional (BN) coalition.

The rising cost of living has often been cited by analysts as the top issue for voters but as the election becomes increasingly too close to call, the 1MDB scandal has returned to the fore with Malay voters more receptive to the allegations of impropriety levelled by influential former premier Mahathir Mohamad, who is now leader of the Pakatan Harapan (PH) opposition pact.

"1MDB registered very low on the concerns of rural Malays in the past," said Dr Johan Saravanamuttu of the S. Rajaratnam School of International Studies. "But with Mahathir harping on this, this community is sitting up to listen as he has the knack of simplifying a complex issue.

"Even if the intricacies are beyond them, a credible leader expressing his concerns is enough to sow seeds of doubt even among hardcore Umno supporters."

Among them is 60-year-old Md Isa, a settler in the government's decades-old Felda land development scheme.

Under the scheme, more than 112,000 poor Malay families were each given 4 ha of land to plant cash crops. The descendants of the settlers, who make up about 9 per cent of Malaysia's 15 million voters, have largely backed the Umno-led government in the past.

But some like Mr Md Isa have doubts about the 1MDB saga, particularly over the discovery of US$700 million (S$920.1 million) in Prime Minister Najib Razak's personal accounts in 2015. Mr Najib has insisted the money was a donation from Saudi Arabia, an explanation backed up by the Saudi foreign minister.

"Which Arab would be so generous to give Malaysia so much money? Village folk understands what's happening. Only they (BN leaders) say that we don't get it," Mr Md Isa said.