The 1MDB Deals That Continue to Haunt Goldman Sachs

The three bond deals took place in 2012 and 2013, and the debt is more than halfway to maturity. Yet for Goldman Sachs Group Inc., the furor surrounding money it raised for a Malaysian state investment fund refuses to go away. The fund, known as 1MDB, is at the center of a global scandal involving claims of embezzlement and money laundering that triggered investigations in the U.S., Singapore, Switzerland and beyond. At least three senior current or former Goldman executives were implicated in the first charges against individuals by U.S. prosecutors. And in the first criminal charges against Goldman since it got embroiled in the scandal, Malaysia is seeking fines in excess of $3.3 billion.

The New York-based bank advised 1MDB on the acquisitions of Tanjong Energy Holdings, from Malaysian billionaire Ananda Krishnan, and domestic power plants from Genting Bhd -- financed by two separate bond offerings in 2012 worth $3.5 billion. In 2013, 1MDB issued an additional $3 billion in debt underwritten by Goldman to raise capital for "new strategic economic initiatives" with Abu Dhabi. (Those potential initiatives were to include a financial center built on 70 acres of prime Kuala Lumpur real estate and named for the father of then-Prime Minister Najib Razak, who is now facing dozens of corruption charges related to 1MDB. Najib denies wrongdoing.) For its work on the bonds, Goldman earned almost $600 million in fees.