In Aug of 2014, as our story began, one of Newrick Holdings Ltd's directors, Benny Tjokrosaputro, signed a deal to sell 575 million shares of PT Hanson International, Tbk (MYRX) to Platinum Partners Arbitrage Fund LP.
The sale and purchase agreement was based on a Repurchase Agreement (Repo), which is a sale of securities with a promise of future repurchase by the seller. Both Newrick and Platinum had agreed 31 Aug 2015 as the future repurchase date.
However, in Feb and Mar 2015, Platinum sold a portion of MYRX shares to a Goldman Sachs, one of the largest financial firms in the United States. Goldman claimed unaware that the shares was bound by a Repo between Newrick and Platinum.
With a portion of MYRX's shares sold to Goldman Sachs, repurchasing the stock back was no longer possible. In Dec 2015, Platinum sold another MYRX shares to Goldman Sachs again. At the same time, a second Repo Agreement for a one-year period ending on 16 Dec 2016 was signed among the same parties.
Benny Tjokrosaputro, the owner of MYRX, reported Goldman Sachs to the police in June 2016 for illegally purchasing shares. Goldman's MYRX shares were then blocked by the police. Benny Tjokrosaputro then filed a case in the South Jakarta District Court against Goldman Sachs.
In short, the Court ruled the sale of MYRX shares to Goldman Sachs in February, March, and December 2015 to be canceled. The Court also granted Benny Tjokrosaputro with IDR 320 billion compensation to be paid by Goldman.
Many parties, notably the Indonesia Stock Exchange (IDX) and capital market participants in general, were baffled by this decision. Transactions at the Stock Exchange are supposed to be final and irrevocable/irreversible. The cancellation of this transaction would create a precedent of uncertainty of future transactions at the Stock Exchange.
In my opinion, Goldman purchase of MYRX stock was legit. The Court should have questioned the sale of MYRX stocks by Platinum before the due date of the Repo agreement. The reasonable ruling should be for Platinum to honor the Repo agreement. They can do this by purchasing an equal amount of MYRX stocks from the market. The fact that Newrick filed the claim against Goldman, instead of against Platinum, should have raised the Judge's suspicion.
In the end, investor's confidence in the Indonesian capital market, particularly foreign investors, is at stake now.