JAKARTA (Reuters) - Goldman Sachs
Tjokrosaputro, president director of Hanson International
Goldman had said that Goldman Sachs International had bought the Hanson shares from New York hedge fund Platinum Partners in a series of "valid" transactions on the Indonesia Stock Exchange (IDX) between February 2015 and December 2015.
A Jakarta court ruled in favour of Tjokrosaputro in November 2017, ordering the U.S firm to return shares and pay 320.88 billion rupiah in compensation.
This verdict was upheld on Thursday by the Jakarta High court. The ruling, published on its website, said that Goldman's transactions had been done without Hanson's knowledge and were against Indonesian law.
Hanson shares last traded at 127 rupiah, valuing a parcel of 425 million shares at about $3.7 million.
The bank planned to appeal the decision, Goldman Sachs spokesman Edward Naylor told Reuters.
A lawyer for Tjokrosaputro, Oscar Sagita, declined to comment as he had not yet reviewed the judgment.
The lawsuit has been seen by some legal experts as a litmus test for Southeast Asia's largest economy, which has launched its biggest drive for foreign investment in a decade.
At stake in the Goldman case is the protection of the rights of foreigners, amid a general lack of transparency in Indonesian court proceedings, they say.
Tjokrosaputro had pledged Hanson shares to Platinum in return for funding on the basis he could get the shares back upon repayment, according to court documents.
Such a repurchase agreement, or a repo, effectively acts as a loan but the deal involves temporarily transferring legal ownership of the shares.
Goldman Sachs International bought the Hanson shares from Platinum as a hedge for the derivatives it had entered into with the fund, a bank spokesman has said.
In late 2014, New York-based Platinum fell into financial difficulties and had trouble paying back a large number of investors, according to U.S. authorities.
Goldman started selling the Hanson shares in 2015, but was forced to stop after Tjokrosaputro filed a police complaint, which he followed up with the lawsuit.
Goldman says in its court filings that it "understands" Platinum originally acquired the Hanson shares from an entity named Newrick Holdings Ltd, rather than from Tjokrosaputro.
According to the "Panama Papers" online database as of 2015, which compiled millions of leaked documents from law firm Mossack Fonseca, Newrick is a company registered in the British Virgin Islands in which Tjokrosaputro was a shareholder.
(Reporting by Cindy Silviana and Fanny Potkin; editing by Ed Davies and Richard Pullin)