The Fall of a Gold­man Sachs Star in Asia

In­vest­ment Bank­ing ▶ Lu­cra­tive deals with a Malaysian gov­ern­ment fund bring trou­ble ▶ “That’s a bit too cozy. A bit too overly gen­er­ous”

Bloomberg Businessweek (North America) - - Markets / Finance -

A for­mer col­league de­scribes Tim Leiss­ner as the kind of banker who could hop in a ca­noe, pad­dle up­stream, and come back with a fee. As a top ex­ec­u­tive for Gold­man Sachs in Asia, he helped build a thriv­ing busi­ness in Malaysia, cul­mi­nat­ing in $6.5 bil­lion in bond sales for gov­ern­ment-run in­vest­ment fundnd 1Malaysia Devel­op­mentt Ber­had, known as 1MDB. The trans­ac­tion­sns­ac­tions made the bank $593 mil­lion,ion, says a per­son familiar with thehe mat­ter.

Now, 1MDB is at the heart of a po­lit­i­cal cri­si­sis for Malaysian Prime Min­is­terr Na­jib Razak, who over-versees the fund’ss ad­vi­sory board.d. He faces ques­tionss over whether the money in the fund hass been spent as in­tended­ded or si­phoned off. Swiss pros­e­cu­tors sus­pec­tus­pect $4 bil­lion may have been mis­ap­pro­pri­ate­do­pri­ated from 1MDB.

Gold­man Sach­schs and Leiss­ner haven’tn’t been ac­cused of wrong­do­ing,ong­do­ing, but the bankerr left his job as South­east Asiaa chair­man for the firm in Fe­bru­ary.bru­ary. He was un­der scruti­nyy for his work on an In­done­sia­nian min­ing ven­ture, and foror writ­ing an al­legedly in­ac­cu­rateac­cu­rate ref­er­ence let­ter.er.

Few cor­po­ra­tion­sa­tions have mas­tered the mix of money and power like New York-based Gold­man Sachs, whose alumni have be­come U. S. law­mak­ers, Trea­sury sec­re­taries, and cen­tral bankers. Leiss­ner’s rise and fall shows how lu­cra­tive— and fraught—that ap­proach can be when the bank ex­ports it world­wide. Leiss­ner’s lawyer, Jonathan Co­gan, didn’t re­spond to mes­sages. Ed­ward Naylor, a spokesman for Gold­man Sachs, de­clined to com­ment.

Leiss­ner joined Gold­man Sachs in 1998, be­com­ing chief of staff to the pres­i­dent of the firm’s Asia op­er­a­tions and later head of in­vest­ment bank­ing in Sin­ga­pore. He showed a ta­lent for mak­ing im­pres­sive con­tac­con­tacts. In May 2006 he was sit­ting on­sta­geon­sta at a news con­fer­ence with Malaymalaysian bil­lion­aire Syed Mokhtar Al-bbukhary, who an­nounced that hhis con­glom­er­ate was tak­tak­ing over power pro­ducer Mal Malakoff in what it called “the largest ac­quisi­ac­qui­si­tion ever un­der­taun­der­taken in Malaysia.” Gogold­man Sachs was an ad­viser on the trans­ac­tion.trans That year, Lleiss­ner made part­npart­ner. The firm later hehelped man­age the ini­tial pub­lic of­fe­ri­of­fer­ings of Malaysia’s bibiggest wire­less opera-o tor­tor and lalargest pay-tv broad­caster.broad­cas

The 1MDB dead­eals were even more re­mar­remark­able. The fund, orig­i­nalo­rig­i­nally set up by Malaysia’s oioil-rich Tereng­ganu state, wwas to be used for projects in­in­clud­ing a fi­nan­cial cen­ter forf the cap­i­tal city Kuala Llumpur. In 2012 and 2013, Ggold­man Sachs helped the fund bor­row bil­lions of dol­lars via three bond sales. Leiss­ner was an ad­viser to the fund early on, ac­cord­ing to a for­mer col­league familiar with the sales. The $593 mil­lion Gold­man Sachs made dwarfed what banks typ­i­cally make from gov­ern­ment debt deals.

“There were large re­quire­ments, and Gold­man was one of the few firms, in fact the only firm, that could pro­vide the so­lu­tion that was re­quired,” says Arul Kanda, pres­i­dent of 1MDB. “Over­all, the ob­jec­tives were met.” He wouldn’t com­ment on Leiss­ner. The bank said last year that

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