ABU DHABI/KUALA LUMPUR (Reuters) - Abu Dhabi has once again extended a deadline for troubled state fund 1Malaysia Development Bhd (1MDB) - the subject of allegations of fraud and money-laundering - to make a debt payment of over $600 million that was originally due at the end of July.

FILE PHOTO: A construction worker talks on the phone in front of a 1Malaysia Development Berhad (1MDB) billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia, February 3, 2016. REUTERS/Olivia Harris/File Photo

1MDB is now required to pay at least $310 million by Aug. 12 and the rest of the money plus interest by Aug. 31, Abu Dhabi’s government-owned International Petroleum Investment Co (IPIC) said in a statement to the London Stock Exchange on Tuesday.

Under a deal struck in April, 1MDB originally agreed to pay $1.2 billion in two installments to IPIC, with the first of about $600 million to be paid by July 31. The Malaysian fund did not honor that commitment and IPIC then gave it a grace period which ended on Tuesday; 1MDB also missed that deadline.

In its brief statement, IPIC did not say what it would do if the new deadlines were missed, but any unraveling of the deal between the two sides could embarrass Malaysian Prime Minister Najib Razak, who founded 1MDB.

Missed payments by 1MDB are a concern for foreign investors, who own a significant share of government bonds in the southeast Asian nation. Allegations of fraud involving 1MDB have already spooked investors by weighing on Malaysia’s currency.

After news of the latest payment extension on Tuesday, 1MDB’s 4.4 percent $3 billion bonds due 2023 gained by a point to trade around 93.25/94.45 cents on the U.S. dollar.

Contacted by Reuters on Tuesday, 1MDB declined to comment. The fund said last week that it was committed to paying Abu Dhabi but there were delays due to “regulatory approvals” needed to get its funds. It did not elaborate on the approvals.

1MDB, a longtime partner of IPIC, defaulted on its bonds a year ago, causing the Abu Dhabi company to ask a London court to arbitrate over a claim totaling some $6.5 billion.

The $1.2 billion deal struck in April was the first big step toward resolving IPIC’s claims. A source aware of the talks said at the time that both parties would continue discussions until December 2020 over an additional amount of $3.5 billion.

1MDB is the subject of money-laundering investigations in at least six countries, including the United States, Switzerland and Singapore. In civil lawsuits, the U.S. Justice Department has alleged that about $4.5 billion was misappropriated from 1MDB.

The Malaysian fund has denied any wrongdoing and Najib has denied all allegations of corruption against him. Malaysia dissolved 1MDB’s advisory board last year, and its assets were either shifted to the government or sold off as part of a rationalization program.