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JAKARTA, July 20 (Reuters) – Goldman Sachs has lost an Indonesian short appeal over whether it should return shares in property developer PT Hanson International Tbk to tycoon Benny Tjokrosaputro in a legal tussle over ownership.
Tjokrosaputro, president director of Hanson International, had sued the U.S. bank for 15 trillion rupiah ($ 1.1 billion), accusing it of making "unlawful" trades in shares and claiming ownership of 425 million shares.
Goldman had said that Goldman Sachs International had bought the Hanson shares from New York hedge fund Platinum Partners in a series of "valid" transactions on the Indonesian Stock Exchange (IDX) between February 2015 and December 2015.
In Jakarta Tjokrosaputro in November 2017, ordering the US firm to return shares and pay 320.88 billion rupiah ($ 22.07 million) in compensation.
This verdict was won on Thursday by the Jakarta High Court. The ruling, published on its website, said that Goldman's transactions had been done without Hanson's knowledge and were against Indonesian law.
Hanson shares lasted at 127 rupiah, valuing a parcel of 425 million shares at about $ 3.7 million.
The bank plans to appeal the decision, Goldman Sachs spokesman Edward Naylor told Reuters.
A lawyer for Tjokrosaputro, Oscar Sagita, declined to comment on the subject.
The lawsuit has been seen by some legal experts as a litmus test for Southeast Asia's largest economy, which has launched its biggest drive for foreign investment in a decade.
At stake in the Goldman case is the protection of the rights of foreigners, amidst a general lack of transparency in Indonesian court proceedings, they say.
Tjokrosaputro had pledged Hanson shares in the back of repayment, according to court documents.
Such a repurchase agreement, or a repo, effectively acts as a loan for the purpose of the transaction.
Goldman Sachs International bought the Hanson shares from Platinum as a hedge for the derivatives it has entered the fund, a bank spokesman has said.
In late 2014, New York-based Platinum fell into a large number of investors, according to U.S. authorities.
Goldman started selling the Hanson shares in 2015, but was forced to stop after Tjokrosaputro filed a complaint, which he followed up with the lawsuit.
Goldman says in its short filings that it "understands" Platinum originally acquired the Hanson shares from an entity named Newrick Holdings Ltd., rather than from Tjokrosaputro.
According to the "Panama Papers" online database as of 2015, which compiles millions of leaked documents from Mossack Fonseca, Newrick is a company registered in the British Virgin Islands in which Tjokrosaputro was a shareholder. ($ 1 = 14,540,0000 rupiah) (Reporting by Cindy Silviana and Fanny Potkin, editing by Ed Davies and Richard Pullin)
Our Standards: The Thomson Reuters Trust Principles.
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