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”

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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