At least one of the three bonds totalling US$6.5 billion raised for 1MDB proceeded without the approval from the board of directors of the bond's chief guarantor, International Petroleum Investment Company (IPIC), reported The Straits Times (ST).

This happened when the US$1.75 billion bond was raised in 2012. The exercise proceeded chiefly on the back of approvals from senior IPIC officials like its then chief executive Khadeem Al Qubaisi, several unnamed senior financial executives were quoted as saying.

Board approval is needed for corporate entities before they undertake any material transaction that introduces risk.

US banking giant Goldman Sachs, which raised the bond, relied on correspondence between senior IPIC executives and high-ranking Malaysian government officials to clear approval hurdles from its internal and external compliance teams, said the sources.

Goldman Sachs, which received over US$600 million in fees from 1MDB bond deals, acknowledged an IPIC board resolution was not obtained for the bond issue, according to the ST report.

"The firm relied on documents provided by IPIC executives and legal opinions of outside counsel evidencing IPIC's authority to enter into the guarantee," Goldman Sachs said in a written response to ST.

On Dec 17, Putrajaya filed criminal charges against Goldman Sachs subsidiaries, the bank’s former employees Tim Leissner and Roger Ng Chong Hwa.

Also being charged were fugitive businessperson Low Taek Jho and former 1MDB employee Jasmine Loo Ai Swan.

The charges arose from the commission and abetment of false or misleading statements by all the accused in order to dishonestly misappropriate US$2.7 billion from the proceeds of these bonds.

"The big issue Goldman (Sachs) will have to establish is whether the other supporting documentation was equal to or greater than a board approval. And also, why it simply did not secure one," said a former executive of a listed company that was involved in the bond issue.

Abu Dhabi government officials did not respond to requests for comment on why the state-owned IPIC committed to the guarantees without board approval.

Goldman Sachs raised bonds in two equal tranches of US1.75 billion meant to finance 1MDB's investment in a power plant and another US$3 billion to fund strategic economic activities.