Temasek Slashes Pay for Executives Who Recommended Investing in FTX (Report)

Temasek Holdings, a private company whose sole stakeholder is the Government of Singapore and whose sole purpose is to oversee said government investments, was responsible for the second largest investment in FTX.

Bad judgment

Prior to the FTX crash, Temasek’s investment was about $275 million, which is 0.09% of the company’s total investment portfolio of about $304 billion.

After the platform collapsed – which led to Temasek writing off its entire investment – Temasek Holdings conducted an internal investigation into the matter to avoid any further damage to its reputation.

Temasek wasn’t the only investment firm to scrap its investment, though it was the most significant investment scratched. Other companies that have done the same include Sequoia Capital, Softbank, and Ontario Teachers’ Pension Plan.

Despite the write-downs, FTX currently still owes various creditors about $52 billion, of which $44 billion is claims recently filed by the IRS.

5/ Some of the following #FTXFTX institutional investors said they would write their FTX investments down to $0:

• Temasek Holdings – $275 million
• Sequoia Capital – $213.5 million
• Softbank – $100 million
• Ontario Teachers Pension Plan – $95 million

– CoinGecko (@coingecko) December 3, 2022

An internal postmortem investigation of Temasek has now taken place I finishwith the company’s internal audit service announcing that no misconduct had been detected on their part, although the auditors stressed that important information that should have been provided to investors – Temasek among them – had been hidden by FTX.

However, the failed investment damaged Temasek Holdings’ reputation, according to Chairman Lin Boon Hing.

“As prosecutors alleged and as acknowledged by senior executives of FTX and its affiliates, there was fraudulent conduct that was intentionally concealed from investors, including Temasek. We are disappointed with the outcome of our investment and the negative impact on our reputation.”

The investment team took over

Since the decision to invest in FTX was made in good faith – and due diligence was also done by Temaseks’ investment management in a rigorous and professional manner – no internal penalties were issued.

However, the investment team that decided to give the green light to invest and the senior management who approved it took full responsibility for the faltering project. As a result, annual compensation for officials has been reduced.

“The investment team and senior management, ultimately responsible for the investment decisions made, were collectively held accountable and their compensation reduced.”

The investment firm declined to comment on whether bonuses or salaries of employees had been cut. Temasek has also remained silent about the exact amount of liquidated damages from its employees’ payroll.