Goldman defends role in sale of Pertamina tankers
Fabiola Desy Unidjaja, The Jakarta Post, Jakarta
Defending its role in the sale of two Pertamina tankers, global investment firm Goldman Sachs is planning to file an objection against the recent ruling by the Business Competition Supervisory Commission (KPPU) in court on March 24.
The KPPU ruled that Goldman Sachs, the financial advisor to Pertamina in the sale process, was guilty of colluding with the state oil and gas firm, eventual tender winner Frontline Ltd. and its agent, Indonesian shipping firm PT Equinox -- which led to potential losses in state revenue.
KPPU made its ruling based on suspected irregularities in awarding Frontline the deal, while another bidder, India-based Essar, had offered the tankers at a higher price than that of Frontline's.
However, Arief Sidarto, Goldman Southeast Asia's chief operating officer, defended the firm's role, saying no regulations were broken while awarding the contract to the Bermuda-based shipping company.
Moreover, he added, Essar was not able to fully comply with requirements set by Pertamina.
"Essar initially offered the highest bid, but failed to fulfill the requirement of paying a 20 percent down payment upon the signing of the sales and purchase agreement.
"That's why we accepted the bid from Frontline," Arief said.
Indian-based Essar bid US$183.5 million for the tankers -- called the Very Large Crude Carrier (VLCC). Frontline's bid was $178 million. The other shortlisted bidder was OSG, which offered $169million.
Local media reports have claimed that the value of the two tankers should have been well over $200 million.
Arief, who handled the tender from the beginning, added that Essar had said that they could not fulfill the 20 percent advanced payment demand, even after the deadline had been extended for two days.
During that the extension period, Frontline came in with a third bid, which exceeded Essar's offer, while also agreeing to comply with the advanced payment requirement.
Frontline was eventually declared the winner with $184 million.
Earlier, the KPPU's Pande Raja Silalahi said that the commission was ready to defend its ruling in court.
KPPU ordered Pertamina's board of directors and commissioners to explain the case to its shareholders, and ordered Goldman Sachs, Frontline and Equinox to pay Rp 19.7 billion (about US$2.04 million), Rp 25 billion and Rp 16.6 billion in fines, respectively.
Goldman and Frontline, which also denied any wrongdoing, were also ordered to pay an extra amount to the government -- Rp 60 billion and Rp 120 billion, respectively -- ostensibly to recoup lost potential revenue.