However, the 1MDB president said that Pua first had to resign from his position in the Public Accounts Committee (PAC) to avoid any potential conflict of interest.
This came after Pua, the DAP national publicity secretary, said Arul had merely "recycled" responses to the allegations during a live interview on Bernama TV, and Malaysians were "no nearer to the truth" on the matter.
Pua said he would host the show and ask the questions, and would give Arul "every opportunity and as much time as he likes to answer these questions".
"However, I am, as ever, willing to be proven wrong," he said.
"In fact, I will bear no grudges if he succeeds in embarrassing me by showing evidence from any 1MDB financial documents which disprove my allegations.
"The question is, will he have the courage to accept the challenge?" he said.
In an immediate reply, Arul agreed to the challenge.
"I hereby accept his challenge and look forward to answering his questions," he said.
"Despite his efforts to do so, YB Tony Pua cannot be judge, jury and executioner.
"As such, I trust he will have the courage to do the right thing and resign from the PAC in order for us to have, in his words, a 'no-holds barred' discussion on live television," he said.
In the live interview with Bernama TV on Wednesday, Arul had said that there was no cover-up in relation to 1MDB and that it would be impossible to do so as there are five investigative agencies looking into them.
Pua is a member of PAC, which investigations into 1MDB were postponed after four of its members, including former chaiman Datuk Nur Jazlan Mohamed, had to step down from the Committee after they were included in the Cabinet in a recent reshuffle.
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