Shares of independent power producer Megapower Makmur soared during its market debut on the Indonesia Stock Exchange (IDX) on Wednesday (05/07). (Reuters Photo/Beawiharta)

Goldman Dispute Will Not Hurt Investor Confidence: IDX


JANUARY 25, 2017

Jakarta. The Indonesia Stock Exchange, or IDX, has said the legal dispute involving an Indonesian businessman and global investment bank Goldman Sachs should not affect confidence in the country's stock market.

Benny Tjokrosaputro, president director of listed property developer Hanson International, filed a $1.1 billion lawsuit at a Jakarta court on Sept. 8 against Goldman's unit Goldman Sachs International and demanded the company's local and overseas assets to be frozen.

Benny alleged Goldman Sachs had conducted unlawful trade of his 425 million Hanson shares or did so without his consent, according to a statement posted on his lawyer's website.

In its defense, Goldman Sachs said that it bought the shares from New York hedge fund Platinum Partners, not Benny, in a series of transactions on the IDX between February 2015 and March 2016.

Goldman has sold some of the shares on the IDX but still sits on some $22 million worth of Hanson shares which have been frozen at the custodian due to a police order. Goldman filed a $1 billion counter lawsuit against Benny at the same district court on Tuesday (24/01).

Law firm Lubis Ganie Surowidjojo, on behalf of Goldman Sachs International, said that if Benny does not withdraw the lawsuit against its client, then investor confidence "could be eroded" and all trades conducted on the IDX could be "compromised," as ownership of shares can be challenged by third parties.

"Goldman should not have said that," Tito Sulistyo, IDX president director, told the Jakarta Globe.

"The dispute is between stakeholders and Goldman [Sachs International], this dispute will not affect any fundamentals," Tito said.

Tito urged the bank to prove that its transactions with Platinum Partners between February 2015 to March 2016 were in fact legitimately made through the IDX, before he could comment further on the matter.

Indonesia places a large emphasis on maintaining investor confidence, especially with regard to foreign investors, as they constitute a large portion of trades conducted in the stock and bond markets. Foreigners hold around 38 percent of government bonds and around a half of listed companies' stocks.