AMERICAN authorities are investigating the US$2.2 billion (RM9.4 billion) purchase of a US energy company by a Middle Eastern investment fund with links to 1MDB, the Wall St Journal reported today.

According to the financial newspaper, the deal was arranged by Goldman Sachs and earned one investor a US$300 million windfall in less than a week.

Quoting those familiar with the investigation, WSJ said the government-linked investor was an important player in the scandal involving 1Malaysia Development Bhd.

Goldman Sachs earned US$60 million in fees arranging US$6.5 billion bond deals for 1MDB.

The US Justice Department, in an asset seizure suit, provided detailed allegations that in 2013 and 2014, funds allegedly stolen from 1MDB were funnelled via a series of bank accounts and shell companies to partly finance the purchase of Coastal Energy, a Houston firm.

The suit seeks to seize proceeds, not assets, from the Coastal deal. 

The Coastal deal involved many of those involved in the alleged schemes to defraud 1MDB.

The buyer was a joint venture between a company owned by Abu Dhabi sovereign-wealth fund International Petroleum Investment Co (IPIC), and a shell company controlled by Low Taek Jho (Jho Low), according to the DoJ.

Goldman Sachs advised the IPIC unit which paid nearly all of the purchase price.

The DoJ filed a US$1 billion asset seizure suit against properties controlled by senior executives of IPIC and Low last year.

Low and his family allegedly purchased London properties with 1MDB funds laundered through the purchase of Coastal Energy.

Low, who was being informally advised by Goldman at the time, first approached Coastal in 2012 about a possible acquisition.

Sceptical over about his ability to come up with the cash, Coastal executives told Low to find a bigger partner.

He returned with IPIC’s Spanish energy unit, Compañía Española de Petróleos SAU, or Cepsa.

The Penangite invested US$50 million in the deal, with Cespa funding the remainder of the US$2.2 billion purchase, according to the DoJ and statements announcing the acquisition.

One week later, Cepsa transferred US$350 million to Low’s shell company.

Before an agreement with the US energy company could be reached, Goldman’s compliance department told its bankers to stop working with Low or his entity on the deal, citing concern over his wealth, people familiar with the matter said. – June 13, 2017.