Goldman Sachs to challenge KPPU ruling in court
The Jakarta Post, Jakarta
Goldman Sachs will challenge in court the Business Competition Supervisory Commission's (KPPU) ruling that declared the global investment firm guilty of colluding in a case revolving around the sale of two tankers of state oil and gas firm Pertamina.
"We will file our objection to the ruling with the district court as soon as possible," Goldman Sachs lawyer Todung Mulya Lubis told The Jakarta Post on Sunday.
Todung said that Goldman Sachs completely rejects KPPU's ruling as the firm was certain it had conducted the sales in accordance with existing regulations and international standards.
Moreover, as the firm was only appointed by Pertamina as its financial advisor for the sale, any decision on the sale should be Pertamina's responsibility, Todung explained.
KPPU ruled on March 4 that the sale of Pertamina's two Very Large Crude Carriers (VLCC) worth US$184 million last year was fraught with irregularities between Pertamina and its three partners -- Singapore-based financial advisor Goldman Sachs, tender winner Bermuda-based shipping company Frontline Ltd. and its agent, Indonesian shipping firm PT Equinox.
The commission found from its examination of 291 documents, 23 witnesses and three experts, that Pertamina had appointed Goldman Sachs as its financial advisor for the sales without holding an open tender as required by law.
KPPU also found that Goldman Sachs had still received a final bid from Frontline though the deadline for all bids had passed.
The sale, the commission concluded, had caused losses to the state amounting to $50 million, as the market price of each tanker was between $120 million and $150 million.
KPPU ordered Pertamina's board of directors and commissioners during the time to explain the case to a shareholders meeting, and ordered Goldman Sachs, Frontline Ltd 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 were also ordered to pay compensation to the state amounting to Rp 60 billion and Rp 120 billion.
Todung said Goldman Sachs rejected KPPU's conclusion that the tanker sale had caused state losses, as the tankers were actually priced at $130 million. Goldman Sachs had also advised Pertamina to carry on with the sale as it was necessary to bring Pertamina back to its core business and help the firm back into the black.
The sale, Todung went on, was also conducted as there was strong evidence that Karaha Bodas Co. -- which is seeking $299 million in compensation from Pertamina over a canceled power project -- was attempting to seize Pertamina's overseas assets, including the tankers.
Meanwhile, the head of KPPU's investigating team for the case, Pande Raja Silalahi, said that the commission was ready to defend its ruling at the district court.
"It is their right to do so. We have faced many parties before who were dissatisfied with our rulings and went to court," he said.
Concerning KPPU's figure of state losses, Pande Raja said that his team had come up with the figure after seeking a reference from shipping experts on the reasonable market price for the tankers, and even comparing the bids of the other contenders.
"A study by Pertamina's former financial advisor, Japan Marine, also concluded that Pertamina should not have sold the tankers," he said.