WASHINGTON (Bloomberg) - Malaysian financier Low Taek Jho spearheaded the initial talks five years ago that led to the US$2.2 billion (S$3.04 billion) takeover of a Houston energy company that is the now the subject of a Justice Department investigation into billions of dollars allegedly looted from state-owned investment fund 1MDB, the Wall Street Journal reported, citing people familiar with the matter.
Low first approached Coastal Energy Co. in 2012 about a possible takeover, the Journal said, that he ultimately purchased in a joint venture with Cepsa, the Spanish energy unit of International Petroleum Investment Co, Abu Dhabi's sovereign wealth fund.
Low invested US$50 million in the deal while Cepsa funded the rest. Goldman Sachs Group Inc advised Cepsa on the deal, according to a statement at the time.
In a complaint dated June 7, the Justice Department said a company connected to Low - Strategic Resources Global - got a US$300 million return in one week on its US$50 million investment in Coastal Energy. It had invested the money through the joint venture, then was bought out a week later by Cepsa.
"The commercial basis for this nearly immediate 600 per cent return on investment is not immediately apparent," the Justice Department said in the complaint.
Low characterised the payment as having resulted from Cepsa's decision that it "wanted full control and ownership of the business", the complaint shows.
A representative of Goldman Sachs didn't immediately respond to a request for comment. Goldman Sachs told the Wall Street Journal that neither Low nor any firm controlled by him was a client in the Coastal deal.
IPIC and Cepsa didn't respond to the Journal's requests for comment.
1MDB President Arul Kanda declined to comment on the matter when contacted by phone.
The Journal didn't include a comment from Low. He has previously denied wrongdoing. A spokeswoman at Hong Kong-based Jynwel Capital Ltd, Low's private company, said he wasn't available for comment.
Last July, the Justice Department said it was seeking to seize more than US$1 billion in assets including real estate, art and proceeds from the Wolf of Wall Street movie that it says were illegally acquired with money diverted from the embattled Malaysian development fund.
In the June 7 complaint, the Justice Department added properties in London allegedly purchased with money it claims was taken from 1MDB and laundered by Low and his family through the purchase of Coastal Energy.
