An Indonesian court ordered Goldman Sachs Group Inc. to pay Rp 320.8 billion ($24 million) in damages to the founder of PT Hanson International, for what was ruled to be an “illegal transaction” to buy shares in the property developer.
The New York-based firm must return the Hanson shares to Benny Tjokrosaputro, Judge Achmad Guntur said in the South Jakarta District Court on Tuesday. The judge also rejected a $1 billion counterclaim the U.S. bank filed last year against the tycoon, who alleged that a Hanson stake held by Goldman was improperly obtained.
“We are surprised and disappointed at today’s ruling by the South Jakarta Court and will be appealing it at the earliest opportunity,” said Edward Naylor, a Hong Kong-based spokesman for Goldman. Tjokrosaputro declined to comment when reached on his mobile phone.
The ruling marks the second setback this year for a prominent U.S. bank as a result of its dealings in Indonesia. In January, the country barred government entities from doing business with JPMorgan Chase & Co. after its analysts made a bearish call on the local stock market. The finance minister signaled last month that Indonesia may lift the ban.
Goldman Sachs International, a London-based unit, had sought the dismissal of Tjokrosaputro’s plea, saying it’s the legal owner of the Hanson shares, court filings show. The bank said it purchased 425 million shares from U.S. hedge fund Platinum Partners LLC through the Indonesian stock exchange in 2015. Confidence in trades made on the bourse could be eroded if Tjokrosaputro’s claims were upheld, the firm had argued.
In its counterclaim, Goldman Sachs said it “understands” that Platinum originally acquired the Hanson shares from Newrick Holdings Ltd. Newrick is a British Virgin Islands-registered company in which Tjokrosaputro is a shareholder, according to the so-called Panama Papers -- a series of leaked documents on offshore shell companies created for the wealthy.
Goldman Sachs has said it never had any dealings with Tjokrosaputro or obligation to him. Any legal dispute of sale should be made between Tjokrosaputro and Platinum since they were the parties involved, it said. New York-based Platinum filed for bankruptcy last year.
Tjokrosaputro plans to spend Rp1 trillion to raise his stake in Hanson to 18.56 percent, paying 127 rupiah each for the shares, the company said in an Oct. 20 statement.
Hanson shares fell 1.9 percent to Rp105 as of 3:02 p.m. in Jakarta, bringing losses this year to 38 percent. That compares with the 14 percent gain in the benchmark Jakarta Composite Index.
— With assistance by Yudith Ho, and Cathy Chan