Action then taken by the Bank of Portugal, the country's central bank, stranded the NZSF's money in a "bad bank" and credit default swaps, purchased to provide insurance in the case of default, voided.
The developments have seen Goldman Sachs and the NZSF take legal action against the central bank.
The NZSF has come under pressure from opposition parties in Parliament. Labour leader Andrew Little called for the Auditor-General to investigate the investment.
Green Party co-leader Russel Norman said the episode raised "serious questions".
In response the NZSF released its performance figures for January a week earlier than expected, showing a $240 million return for the month despite what its chief executive Adrian Orr described as "the challenges we face with the Bank of Portugal".
The remaining third of the Oak Finance investment was written down during this month, following a two-thirds write-down in December. The Weekend Herald understands January's results included an impairment of around $70 million and has seen the Oak Finance investment totally written off.
Orr has defended the loan to BES on the basis that the credit default swaps, also sold by Goldman Sachs, made the investment "risk-free", but the "unprecedented" moves by the Bank of Portugal amounted to a "black swan" event.
But as a political storm threatened to break over the normally conservative fund, news emerged of more exotic wrinkles in the BES transaction.
The Wall Street Journal, citing the Oak Finance prospectus, said the loan to BES was partly intended to enable the bank to lend to a Chinese firm who were contracted to build an oil refinery in Venezuela.
The Chinese firm, Wilson Engineering Services, was awarded a US$834 million ($1.1 billion) contract by Venezuelan state-owned firm PDVSA Petroleo in July 2013 but quickly ran into problems.
Days before the control was formally awarded, Wilson's founder and controlling shareholder Hua Bangson was arrested on unspecified bribery charges in a crackdown by authorities on oil-industry corruption.
Adrian Orr was not giving interviews yesterday, citing the ongoing legal action in Portugal, but on Thursday during a briefing on Oak Finance he confirmed the Venezuelan project was mentioned but downplayed its significance.
"In the prospectus there was like a line like that," he said.
"But our loan was for general purpose use. It is not attached to any particular asset."
Aside from the ramifications in Parliament and bemusement from local market figures, the episode illustrates how global capital flows ignore borders.
Oak Finance saw dollars from New Zealand packaged in a Luxembourg vehicle prepared by a US investment firm to be given to a Portuguese bank who planned to advance some of the money to a Chinese firm to build a refinery in Venezuela.
Orr said yesterday in a statement accompanying the NZSF January results: "This money is not lost. We know exactly where it is."
NZ Super Fund
• Set up with public money in 2001 to meet current and baby boomers' retirement costs.
• Currently holds $27.5 billion in assets.
• Between 2003 and 2009, the Government contributed $14.88 billion to the fund.
• Contributions are scheduled to resume from 2019/20 and from around 2029/30, the Government will begin to withdraw money from the Fund to help pay for New Zealand Superannuation.
• It has delivered a rate of return of 9.95 per cent per annum since 2003.
• Including a write-down of the $200 million lost, the super fund returned 16.71 per cent over the last 12 months.
The $200 million represents 0.7 per cent of the total super fund.Rea
