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Finance Minister Lim Guan Eng said the ministry has appointed a legal firm and has also referred the matter to Attorney-General's Office. Pix by Luqman Hakim Zubir

KUALA LUMPUR: The Finance Ministry is initiating legal action against former 1Malaysia Development Bhd (1MDB) chief executive officer Arul Kanda Kandasamy.

The ministry is demanding that he return the RM2.5 million in advance salary paid to him from January to June this year, and is looking into other civil and criminal action over when he was the 1MDB CEO until it became insolvent.

Finance Minister Lim Guan Eng said the ministry has appointed a legal firm and has also referred the matter to Attorney-General's Office.

He said the ministry is studying the civil aspects of the case while the criminal negligence aspects are being handled by the Attorney-General’s Office.

"We are also looking into the decisions made in 1MDB during his employment which led to the company’s insolvency," he told reporters in Parliament.

Lim also showed Arul’s appointment letter and salary statement, signed by former prime minister Datuk Seri Najib Tun Razak and former ministry secretary-general Tan Sri Irwan Serigar.

Lim said it did not make sense for Arul to be paid so much when there was "no evidence to show that he was earning RM10 million in his previous job."

Najib was previously quoted as saying that Arul, who was working with a bank in the United Arab Emirates, took a big pay cut to join 1MDB and had succeeded in reducing its debts.

Lim shot down Najib’s explanation and said it is “yet another lie.”

"I question the credibility and integrity of the former prime minister. It does not make sense at all. Please show proof first that he (Arul) was earning more previously," Lim asked.

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