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* 1MDB hires Arul Kanda as new President and group exec director
* Arul starts at 1MDB with immediate effect - statement
* Company to undertake strategic review of its business (Recasts with company confirmation)
By Yantoultra Ngui and Saeed Azhar
KUALA LUMPUR/SINGAPORE, Jan 5 (Reuters) - Debt-ridden state fund 1 Malaysia Development Bhd (1MDB) said on Monday that it had hired an Abu Dhabi-based Malaysian investment banker as its new President and group executive director, who will embark on a review of the firm's business.
Arul Kanda succeeds 1MDB's chief executive officer Mohd Hazem Abdul Rahman, who departs less than two years after his appointment in March 2013 amid criticism for leading the company into further debt.
Kanda, who starts at 1MDB immediately, said his priority will be to review the fund's operations.
A cross between a sovereign wealth fund and a private investment vehicle, 1MDB is chaired by Malaysian Prime Minister Najib Razak. But it has faced criticism over the $11 billion in debt it has taken on after buying power plants, its investment decisions and the high fees paid to Goldman Sachs for handling bond issues.
The management change may further delay a long-expected $3 billion initial public offering (IPO) of its power plant assets, sources aware of the discussions told Reuters.
"I can't see the IPO happening for now. They have to sort out many things," said one banking source aware of the matter. Another said the power business is targeting a listing in the second quarter of this year, rather than the first quarter.
One person familiar with the matter said on Monday talks on the IPO have gone quiet because of "internal restructuring". The person declined to elaborate.
The people spoke on condition of anonymity as there were not authorised to discuss the matter publicly.
The company had planned meetings in January with potential cornerstone investors for IPO, sources said previously.
Its power plant IPO was expected to reduce its high debt. However, plans for the sale have been delayed several times due to a longer-than-expected due diligence process and debt refinancing negotiations.
"It is time for the company to silence its critics and deliver against its stated objectives," 1MDB chairman Lodin Wok Kamaruddin said in the statement.
Kanda, who is a Malaysian national, is a trained barrister and had previously worked at Barclays and Credit Agricole with experience in restructuring and corporate finance. In his last role, he was Executive Vice President and Head of Investment Banking at Abu Dhabi Commercial Bank.
He was involved in the restructuring of a number of firms in the Gulf, including Kuwait's Global investment House. (Additional reporting by S. Anuradha of IFR, Stanley Carvalho in ABU DHABI and Trinna Leong in KUALA LUMPUR; Writing by Praveen Menon; Editing by Kenneth Maxwell and Louise Heavens)