Court overturns KPPU tanker sale ruling<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
The Central Jakarta District Court overturned a ruling of the
\nBusiness Competition Supervisory Commission (KPPU) over state oil
\nfirm PT Pertamina's tanker sale, saying it found no elements of
\nunhealthy competition in the deal.<\/p>\n
Responding to the verdict favoring the plaintiffs --
\nPertamina, the deal's financial advisor Goldman Sachs Pte.,
\ntender winner Frontline Shipping Ltd. and its local agent PT
\nEquinox -- KPPU's lawyers said that they would appeal to the
\nSupreme Court within 14 days.<\/p>\n
The panel of judges said on Wednesday that Frontline, which
\noffered US$178 million for the two Very Large Crude Carriers
\n(VLCCs), scored higher than its competitor Essar Shipping Ltd.,
\ndespite the latter's $183 million bid.<\/p>\n
"Essar could not provide a 20 percent down payment on time, as
\nwas shown by a letter from its guarantor the State Bank of
\nIndia," said the judge.<\/p>\n
Bermuda-based Frontline later raised its bid through Equinox
\nto $183.5 million and was announced as tender winner.<\/p>\n
The court opined that due to the limited time -- Pertamina was
\nconcerned that the assets could be seized at any time as a result
\nof its dispute with Karaha Bodas Company (KBC) -- Goldman Sachs
\ndid not have to ask for a third bid from the other shortlisted
\ncandidates, Essar and Overseas Shipholding Group (OSG).<\/p>\n
"Essar could not fulfill the requirements and OSG had always
\nbid lower than the others in the earlier biddings," the court
\nsaid.<\/p>\n
It further said that the state did not suffer losses from the
\nsale as Pertamina built the two tankers for $130.8 million,
\ndespite reports that the tankers were worth well over $200
\nmillion.<\/p>\n
KPPU's lawyer David Tobing stuck to the view that the deal was
\nriddled with irregularities.<\/p>\n
"The tender winner was announced on June 10 (last year)," he
\nsaid. Pertamina meanwhile obtained an approval for the VLCC sale
\nfrom the State Minister of State Enterprises, which represented
\nthe government as the shareholder, only on June 11, he added.<\/p>\n
"Pertamina sent a letter to the Minister of Finance in July
\nrequesting an approval for the tanker plan," said Tobing, showing
\na copy of the letter.<\/p>\n
"The deal was closed a month before (the letter), but the
\nprocedures for approval were conducted afterwards."<\/p>\n
Amir Syamsuddin, one of the plaintiffs' lawyers, said that the
\ncase reflected KPPU's lack of understanding of business
\ncompetition.<\/p>\n
The court's decision annulled the financial and legal
\nconsequences of KPPU's ruling, which was issued in early March.<\/p>\n
At the time, KPPU ordered Pertamina's board of directors and
\ncommissioners to explain the case to its shareholders. Goldman
\nSachs, Frontline and Equinox were required to pay Rp 19.7 billion
\n($2.08 million), Rp 25 billion and Rp 16.6 billion in fines,
\nrespectively.<\/p>\n
Goldman and Frontline were also ordered to pay Rp 60 billion
\nand Rp 120 billion, respectively, to recoup lost potential
\nrevenue.<\/p>\n
The district court also ordered the KPPU to pay court costs
\namounting to Rp 14.5 million.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/court-overturns-kppu-tanker-sale-ruling-1447893297",
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